• 4 minutes End of Sanction Waivers
  • 8 minutes Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 14 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 19 mins Permafrost Melting Will Cost Us $70 Trillion
  • 16 hours New German Study Shocks Electric Cars: “Considerably” Worse For Climate Than Diesel Cars, Up To 25% More CO2
  • 12 hours UNCONFIRMED : US airstrikes target 32 oil tankers near Syria’s Deir al-Zor
  • 13 hours Russia To Start Deliveries Of S-400 To Turkey In July
  • 1 day Occidental Offers To Buy Anadarko In $57 Billion Deal, Topping Chevron
  • 13 hours Nothing Better than Li-Ion on the Horizon
  • 5 hours At Kim-Putin Summit: Theater For Two
  • 1 day Facebook Analysts Expect Earnings Will Reinforce Rebound
  • 5 hours NAFTA, a view from Mexico: 'Don't Shoot Yourself In The Foot'
  • 13 hours How many drilling sites are left in the Permian?
  • 2 hours "Undeniable" Shale Slowdown?
  • 1 day Iran Sabre Rattles Over the Straights of Hormuz
  • 5 hours Gas Flaring

India’s Biggest Bank To Stop Handling Iran Oil Payments

oil tanker

India’s largest bank, State Bank of India, has told local refiners that it will no longer handle payments for oil imports from Iran beginning in November, the head of finance at Indian Oil Corp (IOC) told Reuters on Friday.

According to IOC and other refiners, the companies in India currently use the State Bank of India (SBI) and Germany-based Europaeisch-Iranische Handelsbank AG (EIH) to purchase oil from Iran in euros.

“[Oil] loading will be affected from end-August under the current mechanism unless a new payment route is established,” IOC’s finance chief A.K. Sharma told Reuters in a telephone interview today.

Speaking to India’s Economic Times, Sharma said:

“Once the current payment channel is blocked, supplier [Iran] has to decide if it wants to trade with us in rupee or sell oil on credit in anticipation of channels re-opening in future.”

Iran currently offers a 60-day credit period for its exports to India, so cargoes loaded at the end of August will be due for payment in November.

According to analysts, Iran may have to offer more incentives to India to entice one of its biggest customers to continue buying its oil. One possible concession that India could ask for is a discount instead of credit period for payments, Sri Paravaikkarasu, head of East of Suez Oil at consultancy FGE, told Reuters.

Related: The Bullish And Bearish Case For Oil

India is Iran’s second single biggest customer after China. India’s oil import from Iran jumped last month to their highest since October 2016 to around 705,000 bpd, but expectations are that Indian imports will start dropping from this month because at least two large refiners are said to be getting ready to cut imports from Iran.

Nayara Energy—formerly known as Essar Oil—is said to have started scaling back oil purchases from Iran this month, while another big Indian refiner, Reliance Industries, which owns the world’s largest refining hub and has significant exposure to the U.S. financial system, is reportedly planning to stop importing oil from Iran in October or November.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News