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Tehran denies China's $30 billion debt to Iran

Oil&Gas Materials 26 July 2011 15:03

Iran Azerbaijan, Baku, July 26 /Trend. Khatinoglu/

The Governor of Central Bank of Iran (CBI) denied the recent media reports about China's $30 billion debt over Iran's oil export, Mehr News Agency reported quoting CBI Governor Mahmoud Bahmani as saying.

"It is not true and the Central Bank of Iran will never allow oil debts of any country to reach to $30 billion," he added. "India's debt to Iran is considered to be the biggest, but we are negotiating to receive the money."

Tehran and Beijing are in talks about using a barter system to exchange Iranian oil for Chinese goods and services, as US financial sanctions have blocked China from paying at least $20bn for oil imports reported Financial Times on July 24.

The US sanctions against Iran, which make it extremely difficult to conduct dollar-denominated business, mean that China could owe the oil-rich nation as much as $30bn, according to people familiar with the problem.

Iran is China's third crude oil supplier exporting more than $17 billion worth oil and gas, alongside steel, steel ingots , copper, pistachio , saffron and other non - oil products.

Iran is the second-largest crude supplier to India after Saudi Arabia and accounts for about 14 percent of the country's oil import bill.

Despite India's debt, Iran continues to export to India 400,000 barrels of oil per day worth $1 billion per month.

Tension between the two countries for oil payment started on Dec. 23 when India's Central Bank ( Reserve Bank of India ) put restrictions on transactions with Iran through the Clearing House System, Asian Clearing Union , believed by Washington to be used by Tehran for bypassing international sanctions.

India has agreed to stop paying for its Iranian oil imports via Germany since the German Chancellor Angela Merkel intervened by instructing Germany's central bank Deutsche Bundesbank to stop clearing payments from India to the bank, known as EIH , which is under U.S. but not EU sanctions.

Iran is the second-largest crude supplier to India after Saudi Arabia and accounts for about 14 percent of the country's oil import bill.

India 's state-run refiner Hindustan Petroleum said on Thursday it will not get oil supplies from Iran in August with Tehran insisting on resolving a seven-month-old payment row, reported Reuters .

HPCL runs a 130,000-barrel per day (bpd) refinery in Mumbai and a 166,000 bpd facility at Vizag. HPCL has a term deal with National Iranian Oil Co to annually buy 70,000 bpd oil.

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