Daily Sabah logo

Politics
Diplomacy Legislation War On Terror EU Affairs Elections News Analysis
TÜRKİYE
Istanbul Education Investigations Minorities Expat Corner Diaspora
World
Mid-East Europe Americas Asia Pacific Africa Syrian Crisis Islamophobia
Business
Automotive Economy Energy Finance Tourism Tech Defense Transportation News Analysis
Lifestyle
Health Environment Travel Food Fashion Science Religion History Feature Expat Corner
Arts
Cinema Music Events Portrait Reviews Performing Arts
Sports
Football Basketball Motorsports Tennis
Opinion
Columns Op-Ed Reader's Corner Editorial
PHOTO GALLERY
JOBS ABOUT US RSS PRIVACY CONTACT US
© Turkuvaz Haberleşme ve Yayıncılık 2023

Daily Sabah logo

عربي
  • Politics
    • Diplomacy
    • Legislation
    • War On Terror
    • EU Affairs
    • Elections
    • News Analysis
  • TÜRKİYE
    • Istanbul
    • Education
    • Investigations
    • Minorities
    • Expat Corner
    • Diaspora
  • World
    • Mid-East
    • Europe
    • Americas
    • Asia Pacific
    • Africa
    • Syrian Crisis
    • Islamophobia
  • Business
    • Automotive
    • Economy
    • Energy
    • Finance
    • Tourism
    • Tech
    • Defense
    • Transportation
    • News Analysis
  • Lifestyle
    • Health
    • Environment
    • Travel
    • Food
    • Fashion
    • Science
    • Religion
    • History
    • Feature
    • Expat Corner
  • Arts
    • Cinema
    • Music
    • Events
    • Portrait
    • Reviews
    • Performing Arts
  • Sports
    • Football
    • Basketball
    • Motorsports
    • Tennis
  • Gallery
  • Opinion
    • Columns
    • Op-Ed
    • Reader's Corner
    • Editorial
  • TV

India to pay $700M to Iran in outstanding oil dues this week

by

NEW DELHI Sep 29, 2015 - 12:00 am GMT+3
Refiners will be making payment in rupees equivalent to $700 million to the state-run UCO Bank on Wednesday this week, said three sources with direct knowledge of the matter.
Refiners will be making payment in rupees equivalent to $700 million to the state-run UCO Bank on Wednesday this week, said three sources with direct knowledge of the matter.
by Sep 29, 2015 12:00 am

After the July nuclear deal, between Iran and the P5+1 the first official step toward lifting sanctions imposed on Iran, India will be the first to make a bulk payment of $700 million to Iran in exchange for its oil purchases

India will make a $700 million oil payment to Iran on Wednesday, sources said, the first release of such funds after the July deal that sets the roadmap for the lifting of sanctions aimed at Tehran's nuclear activities.

Partial payments of some of Iran's oil dues have been allowed since early 2014 on the basis of a temporary deal that was a prelude to the July agreement, which will eventually end economic sanctions imposed on the country in exchange for curbs to its disputed nuclear programme.

Toughened sanctions put in place in early 2012 had halved Iran's oil exports and strangled its oil revenue, crippling its economy and finally bringing it to the negotiating table.

The sanctions are widely expected to be terminated in 2016 if Iran complies with terms of deal agreed on July 14. Refiners will be making payment in rupees equivalent to $700 million to the state-run UCO Bank on Wednesday this week, said three sources with direct knowledge of the matter.

They said UCO Bank has already bought dollars in the forward markets for payments into the Central Bank of Iran's account with Oman's Bank Muscat.

The sources said U.S. Treasury's Office of Foreign Assets Control (OFAC) has already approved the banking mechanism and payment of $1.4 billion by Indian refiners in two equal instalments to Tehran. Timing for the second installment is not yet known, the sources said. A U.S. Treasury spokeswoman declined comment.

Indian refiners have been depositing 45 percent of their oil payments to Iran in rupees with UCO Bank since 2012. Tehran uses the funds, currently more than 170 billion Indian rupees ($2.57 billion), for importing non-sanctioned goods from New Delhi.

Refiners have been holding the remainder after a route to pay for oil through Turkey's Halkbank was stopped in 2013 under pressure from sanctions, although payment of some of those funds was allowed after the initial temporary deal. Indian refiners owed about $6.6 billion to Iran as of the end of August.

Essar Oil owes about $3.1 billion, Mangalore Refinery and Petrochemicals Ltd $2.8 billion, followed by Indian Oil Corp, which owes $581 million. HPCL-Mittal Energy Ltd (HMEL) owes $97 million and Hindustan Petroleum Corp has to pay $29 million.

Sources said HMEL, which last made purchases from Iran in 2013, has not been participating in the payment mechanism because of a sharp decline in the rupee since then.

The remaining four companies will pay Iran amounts in proportion to what they owe, the sources said. HMEL Chief Executive Prabh Das declined to comment.

India is Iran's biggest oil client after China, although New Delhi has reduced purchases under pressure from the sanctions. Tehran is now its seventh-biggest supplier, down from the No. 2 spot in the pre-sanctions era.
About the author
Research Associate at Center for Islam and Global Affairs (CIGA) at Istanbul Sabahattin Zaim University
  • shortlink copied
  • RELATED TOPICS
    fight-against-terrorism DEUTSCHE-BANK US-LIBYA-RELATIONS
    KEYWORDS
    business
    The Daily Sabah Newsletter
    Keep up to date with what’s happening in Turkey, it’s region and the world.
    You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    No Image
    Digital Art Fair Asia dazzling with digital and NFT art
    PHOTOGALLERY
    • POLITICS
    • Diplomacy
    • Legislation
    • War On Terror
    • EU Affairs
    • News Analysis
    • TÜRKİYE
    • Istanbul
    • Education
    • Investigations
    • Minorities
    • Diaspora
    • World
    • Mid-East
    • Europe
    • Americas
    • Asia Pacific
    • Africa
    • Syrian Crisis
    • İslamophobia
    • Business
    • Automotive
    • Economy
    • Energy
    • Finance
    • Tourism
    • Tech
    • Defense
    • Transportation
    • News Analysis
    • Lifestyle
    • Health
    • Environment
    • Travel
    • Food
    • Fashion
    • Science
    • Religion
    • History
    • Feature
    • Expat Corner
    • Arts
    • Cinema
    • Music
    • Events
    • Portrait
    • Performing Arts
    • Reviews
    • Sports
    • Football
    • Basketball
    • Motorsports
    • Tennis
    • Opinion
    • Columns
    • Op-Ed
    • Reader's Corner
    • Editorial
    • Photo gallery
    • Jobs
    • privacy
    • about us
    • contact us
    • RSS
    © Turkuvaz Haberleşme ve Yayıncılık 2021