Delhi clears outstanding oil payments to Iran

Tehran: India has cleared outstanding dues related to blocked oil payments to Iran. These had accumulated to $5 billion over a period of ten-odd months as both nations were blocked in their attempts to find a suitable conduit through which Indian payments for oil imports from Iran could be routed.

Iranian central bank governor Mahmoud Bahmani confirmed the fact to the official IRNA news agency on Sunday.

Iran is under UN sanctions, because of which India's central bank blocked payments through the Asian Clearing Union (ACU) a regional payment facility. This necessitated a search for a conduit through which could bypass the sanctions regime and determined attempts by Western countries to block all such attempts.

"Although all the $5 billion of India's oil debt has been cleared, because of selling oil again Iran will always be a creditor of that country," Bahmani said. He also clarified that payment was received in cash and not in kind through barter.

"So far, Iran has not had a bartering system with India for receiving oil debts but if it happens it would be for those products which are of a high quality and are needed by Iran," he said.

India will continue to owe money to Iran as the Gulf nation extends a credit facility for three months to India and inspite of threatening noises in the recent past has continued supply of crude to Delhi.