16 June 2018, News Wires – India will from November not be able to use European banks for making payments for crude oil it buys from Iran as US sanctions against the Persian Gulf nation take effect, senior officials said.
State Bank of India (SBI), the country’s largest lender, has communicated to oil refiners that the euro payment route will be not available after November 3, Indian Oil Corp (IOC) Director (Finance) A K Sharma said.
US President Donald Trump had last month pulled out of a landmark nuclear deal and said sanctions will be re-imposed on Iran within 180 days.
However, it is not “doomsday” for Indian refiners and alternate crude oil sources in the Middle East, US and Russia can be tapped should Iranian supplies dry up due to payment problems, Bharat Petroleum Corp Ltd (BPCL) Director (Finance) R Ramachandran said.
“Once the current payment channel is blocked, supplier (Iran) has to decide if it wants to trade with us in rupee or sell oil on credit in anticipation of channels re-opening in future,” Sharma said.
India pays its third largest oil supplier in euros using European banking channels and imports can continue on alternate modes should it be blocked, he said.
Currently, oil firms first transfer funds to SBI, which in turn uses Germany-based Europaeisch-Iranische Handelsbank AG (EIH) to pay in euros to Iran.
- PTI/ET Energy World