India pays off $5bln debts for Iran's oil (UPDATE)

Oil&Gas Materials 4 September 2011 12:23

Azerbaijan, Baku, Sept. 4 /Trend/

(Details were added, the first version was posted at 11:54)

India has paid off all its oil debts for oil imports from Iran, IRNA reported quoting Governor of Iran Central Bank Mahmoud Bahmani as saying on Sunday.

"India has completed payment of $5 billion to Iran over oil debt, however still small amount remains over recent oil export to India," he said.

He noted India also offered to pay off its debt through exporting commodities to Iran, which was refused by Iran.

Iran 's oil export to India reduced by 90,000 barrels of oil per day from July 23, however the Oil Ministry says the reduction is temporary and connected with technical problems in India's oil terminals, but not with India's debts

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

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

The tension between two countries for oil payment started in December 23 when India's Central Bank (Reserve Bank of India) placed restrictions on transactions with Iran through the Clearing House System (Asian Clearing Union) that Washington believes Tehran has been using to bypass international sanctions.

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