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India Begins Paying For Iranian Oil In Rupees

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India Begins Paying For Iranian Oil In Rupees

Click to see the full-size image

India began paying for Iranian crude oil in rupees, Charan Singh, executive director at Indian state-owned UCO Bank told Reuters on January 8th.

This is the first such payment since the US reimposed its second batch of sanctions on November 5th, 2018. This is in continuation of a previous story, in which India said it had not yet worked out a payment mechanism to circumvent the sanctions.

India was one of eight countries that received a six-month waiver from the sanctions, allowing them to import some Iranian oil.

India Begins Paying For Iranian Oil In Rupees

Click to see the full-size image

“India, the world’s third biggest oil importer, wants to continue buying oil from Iran as it offers free shipping and an extended credit period, while Iran will use the rupee funds to mostly pay for imports from India,” Reuters reported.

“Today we received a good amount from some oil companies,” Charan Singh said. He did not disclose the names of the refiners or how much had been deposited.

ZeroHedge reported that this takes place amid reports that India is planning on circumventing the US dollar in oil trades with Russia, Venezuela and Iran. The trades would be made either in rupees or under a barter agreement.

To reinforce the notion that it plans to purchase Iranian oil, New Delhi recently issued a notification exempting payments to the National Iranian Oil Co (NIOC) for crude oil imports from steep withholding taxes, enabling refiners to clear an estimated $1.5 billion in dues.

“In the previous round of U.S. sanctions, India settled 45 percent of oil payments in rupees and the remainder in euros but this time it has signed deal with Iran to make all payments in rupees as New Delhi wants to fix its trade balance with Tehran,” Reuters reported.

Furthermore, Indian imports from Iran were approximately $11 billion between April and November 2018, with oil accounting for 90% of the sum.

Singh said that Indian refiners had made payments to 15 banks. But payments will be made into the accounts of only 9 Iranian lenders as one is closed and the US has imposed secondary sanctions on five others. The nine banks are Saman Bank Corp., Bank Pasargad, Bank Eghtesad Novin, Karafarin Bank, Bank Samayeh, Middle East Bank, City Bank, Bank Hekmat Iranian, and Tourism Bank.

Iranian Foreign Minister Javad Zarif arrived in India on January 7th.  At the New Delhi airport, Zarif told reporters that Iran and India had good relations even after re-imposition of US sanctions, adding:

“We have a good banking agreement with Indians, which was signed this fall and after [re-imposition] of sanctions, and this agreement allows our country to continue both exports and imports while meeting its financial needs.”

Zarif also emphasized that Iran has been, and will continue to be a reliable supplier of crude oil to India.

Iran is also devising payment mechanisms to continue trading with partners such as China, Russia and Turkey, in addition to India. The EU is also reportedly working on mechanisms to establish non-dollar trade with Iran, however it is moving slower than expected, Zarif said.

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  • Brother Ma

    Time for the Euro countries to retake sovereignty and monetary,fiscal and economic policy. Rump issues like customs etc can remain with the eu for the time being.

    • Sinbad2

      They are hooked, the Europeans are junkies, and the US is their dealer.

  • Brother Ma

    So Iran and india trade in rupees? So what! Don’t the transactions still go through SWIFT?
    So have the eu bureaucrats and the technocrats that so eagerly signed up for Swift get whipped or fired yet? I could see it was an excellent zioyankee controlling tool. Why didn’t they? So now the EU is forced to trade in US dollars even after all its tough talk.

    • Sinbad2

      No it doesn’t go through SWIFT.
      Iran delivers the oil, the buyer deposits the money in an Iranian account at an Indian bank.

      The interesting question, is what does Iran buy with its Rupees?

      I would suggest gold

      • Brother Ma

        Well that is what i thought the EU could do too. So why then does the Eu come up with so -called “technical problems” on how it can’t go around SWIFT. It said it could and would . Excuses?

        Gold? Yes. I reckon you are right! India has lots of gold and is big in gold -buying. Russia will start a gold-backed rouble maybe?

        • Chris Saunders

          The EU is America’s B*tch and doesn’t have the same freedom of movement as does India. Europe is occupied, colonized US territory unfortunately, until they start to stand up against the oppression and bullying . .

          • Brother Ma

            Sadly ,you are all too correct..

  • Master Oroko

    A small victory, but a victory nonetheless.

  • Jesus

    Enough of the EU SPV all talk and no action, trading in local currencies and barter is the way to go circumventing the dollar and euro.
    In due time the euro and dollar will start feeling the pain of having excessive currency nobody wants for trade.

  • FlorianGeyer

    Trump fails to recognise that India and many more ancient civilisations have much regard for manners.
    Trump is essentially a bully and an oaf , who, in spite of ths money is moronic.

    He behaves in te same crass way as a drug dealer with cash to flash.