India set to pay for Iranian oil using rupees from November

India set to pay for Iranian oil using rupees from November

India set to pay for Iranian oil using rupees from November

Crude exports at 1.6 million bpd are down by around 35 percent compared to Iran's peak 2.5 million bpd exports in April, just before the USA announced it was slapping sanctions back on Tehran.

The US' sanctions on the import of Iranian petroleum products will be effective from November 4.

In 2010, India's central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran.

Indian refiners will pay for oil from Iran in rupee, using UCO Bank and IDBI Bank, from November 4 when petroleum-related sanctions against the Islamic Republic take effect, according to people familiar with the matter.

In May, U.S. President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the renewal of U.S. sanctions.

In September, the trend of reduced Iranian oil exports has continued, and analysts expect further cuts from some of Iran's oil customers.

A man holds the flags of India and the US while people take part in the 35th India Day Parade in New York August 16, 2015.

Indian refiners are now using State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros.

With India taking a final call on continuing with crude oil imports, a bilateral meeting between India and Iran is likely to take place by the end of this month.

India, which is the second-biggest buyer of Iranian oil, is also looking elsewhere for crude.

Work was slowed by the difficulty equipment suppliers had in obtaining financing for the project, a effect of hesitancy among banks about whether the United States might still try to sanction the project.

The sanctions would come into full force on November 4 and the U.S. expects all countries, including India, to bring down their import of Iranian oil to zero by then.

Earlier, India was looking at the likelihood of falling back on the rupee-rial arrangement for importing oil from Iran in the wake of United States sanctions.

Iran's crude oil and condensate sales fell in August to below 2 million bpd-the lowest level in more than a year, according to tanker tracking data compiled by Bloomberg.

Oil accounts for almost 80 per cent of Iran's tax revenue, according to the International Monetary Fund, making petroleum the regime's economic lifeblood.

In today's meeting - attended by Jaitley, Foreign Minister Sushma Swaraj and Road Minister Nitin Gadkari - it was chose to start importing crude oil from the Chabahar port in Iran.

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