Iran Economy NewsIran warns it may halt crude supplies to India

Iran warns it may halt crude supplies to India

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AFP: Iran on Tuesday issued a new warning that it will halt supplies of crude to India unless the issue of billions of dollars in overdue payments is resolved.

TEHRAN, July 19, 2011 (AFP) – Iran on Tuesday issued a new warning that it will halt supplies of crude to India unless the issue of billions of dollars in overdue payments is resolved.

“If the Iranian side feels it cannot receive the money for its exported oil punctually and under desirable conditions, it will reconsider” its crude exports to India, foreign ministry spokesman Ramin Mehmanparast told his weekly press conference.

India is Iran’s second largest client after China and absorbs about 20 percent of its crude exports, but New Delhi has been struggling for more than six months to pay Tehran due to international banking sanctions imposed on the Islamic republic over its nuclear programme.

Central Bank of Iran chief Mahmoud Bahmani has estimated India’s overdue crude payments at around $5 billion, according to the official IRNA news agency.

In early July, Iran said it had “seriously warned” Indian refineries of the possibility of a halt in oil exports because of overdue payments.

And on Monday Fars news agency, quoting an unnamed Iranian oil official, said crude deliveries to India for August would be withheld unless the payment problems are resolved.

Commenting on the Fars report, Mehmanparast told AFP Tuesday the Iranian side “will review the issue, if there is a problem (over payments), the transaction will be halted. If there are no problems, it will continue.”

Iran and India have been trying to negotiate a new payment mechanism, after various Asian, Middle-eastern and European banking channels were successively closed due to international sanctions slapped on Tehran over its controversial nuclear programme.

The United States and European Union have targeted Iran’s banking, financial and vital energy sectors with unilateral measures.

The annual trade between India and Iran stands at an estimated $12 billion, with India purchasing some 400,000 barrels of Iranian crude per day.

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