Reuters: State-run Indian Oil Corp has introduced a clause in its latest crude buy tender, shifting away from U.S. dollar in favour of the euro in paying for imports through Iranian vessels, oil sources said on Friday.
By Nidhi Verma
NEW DELHI (Reuters) – State-run Indian Oil Corp has introduced a clause in its latest crude buy tender, shifting away from U.S. dollar in favour of the euro in paying for imports through Iranian vessels, oil sources said on Friday.
Iran, the world's fifth-largest oil exporter, is under U.S. and U.N. sanctions over its disputed nuclear programme, which Tehran says is for peaceful electricity generation but which the West suspects is aimed at developing atomic bombs.
"In the event of IOC using an Iranian vessel, then payment for the cargo will be made in euros by telegraphic transfer without recourse to letter of credit, as per normal trade credit period of 30 days after bill of lading date," a trade source, who has received the tender document, told Reuters.
IOC meets one to two percent of its vessel requirements through Iranian ships, another source said.
The source, who did not wish to be identified as he was not authorised to speak to the media, said IOC usually made payments in dollars for crude cargoes shipped in Iranian vessels and details of the vessels revealed to U.S. bankers.
"Somehow IOC was managing it so far but a risk is always there that payments in dollars might get blocked if crude is imported in Iranian flag carrier," he said, adding that was why the new clause to pay in the euro was being introduced.
In its latest tender IOC ought sweet barrels for March lifting. The tender closes on Tuesday and bids remain valid until Wednesday. IOC makes spot purchases of crude on free on board basis.
In its previous tender for February and March loading IOC took 4 million barrels of West African crude — one million barrels each of Nigerian Qua Iboe , Escravos, Yoho and Equatorial Guinean Zafiro.
IOC which operates about 10 refineries spread across India for a total capacity of 1.204 million bpd, tenders several times a month to buy crude, mainly West African barrels.
(Editing by James Jukwey)