Iran despatches crude to India after $1.4 billion payment

Mumbai: India's oil trade with Iran has resumed with two Indian oil tankers sailing to an Indian port from Iran soon after the embattled Gulf nation received 1 billion euros ($1.4 billion) from refiners in India by way of partially clearing debt on their oil imports.

''Indian refineries debt until last week stood at $4.8 billion, but we have now received about one billion euros of it,'' National Iranian Oil Co managing director, Ahmad Qalebani, was quoted as saying today by the state-run Fars news agency. ''So in August, exports to India continued as in previous months.''

Even as Iran continues to battle international sanctions over its nuclear programme, Indian refiners have been finding it extremely difficult to find a reliable conduit through which to route their payments. Earlier, the Indian central bank had blocked payments through the Asian Clearing Union, a regional mechanism for financial transactions, under US pressure.

Iran is the second-largest oil producer in OPEC after Saudi Arabia and also the second largest exporter of crude to India after the Saudis.

According to reports, two oil tankers owned by the Shipping Corp of India and the Great Eastern Shipping company are on their way to the western Indian port of Mangalore, carrying crude from Iran.

Both ships took on their crude cargo from the Iranian Kharg Island terminal late last week, according to available data.

Indian refiners have made payments through Turkey's state-run Halk Bankasi and now expect this route to continue to be functional so as oil trade remains normal.

Payments were made by Mangalore Refinery & Petrochemicals (MRPL), Essar Oil Ltd and Hindustan Petroleum Corp Ltd (HPCL).

Market reports suggest that Bharat Petroleum Corp (BPCL) and Essar Oil will buy additional Saudi Arabian crude in August, joining HPCL in seeking to replace Iranian supplies. The veracity of these reports is uncertain.