Reuters: India’s government will likely resolve a payment impasse with Tehran for buying Iranian crude by having Indian companies to open rupee accounts in Union Bank of India, local media in India reported on Thursday.
NEW YORK, July 28 (Reuters) – India’s government will likely resolve a payment impasse with Tehran for buying Iranian crude by having Indian companies to open rupee accounts in Union Bank of India, local media in India reported on Thursday.
Iranian officials will likely travel to India this weekend to discuss the deal, which would see Union bank make payments to Halk Bank in Turkey, the Business Standard online reported in an item with a New Delhi dateline.
India and Iran have failed since December to find ways for New Delhi to pay for imports, after India’s central bank stopped payments through the Asian Clearing Union (ACU) mechanism.
There is no ban against buying Iranian crude, but sanctions have made financing trade with Iran tough.
The central bank’s move won praise from Washington and came close on the heels of a visit to India by U.S. President Barack Obama last year. Obama has endorsed India’s bid for a permanent seat on the U.N. Security Council.
The United States and its allies aim to isolate Iran to halt its nuclear program, which they say is to develop weapons. Iran says it needs nuclear power supplies.
Iran normally supplies about 12 percent of India’s total oil demand of 3.46 million barrels per day (bpd), but several refiners have sought supples from Saudi Arabia for August to make up for the lack of Iranian crude.