India making 'best efforts' for oil payments to Iran

India is making "best efforts" to make payments for crude oil it imports from Iran as it will abide by only UN sanctions and not those imposed by any individual or a regional block, Oil Minister S Jaipal Reddy said today.

"I can only say Iran's attitude to India is still very positive. We have made our best efforts to make payments. In spite of difficulties, government of Iran has put up with us," he told reporters here.

"It will be our effort to tap Iran as source [of oil] fully," he added.

New Delhi is exploring all options to pay Iran as new US sanctions make it tougher for the two countries to find ways of payment for their trade in crude.

"We will respect every bit of sanction imposed by United Nations. We do not go by sanctions imposed by regional blocks or individual nations," he said, rejecting US sanctions that deny access to the US financial system to any foreign bank that conducts business with the central bank of Iran.

US President Barack Obama on December 31 signed into law such measures.

European Union foreign ministers today agreed to ban oil imports from Iran starting July 1 as part of measures to ratchet up the pressure on the Persian Gulf nation's nuclear programme.

"The situation is evolving. We will firms ways of meeting the situations as it evolves," Reddy said when asked if India was exploring payments to Iran in other currencies including rupee in case the current conduit through Turkey comes under pressure.

A multi-disciplinary team last week visited Tehran to discuss options for payment of USD 12 billion a year trade.

"It will be our endeavour in future to tap the Iran source fully because the terms are fairly favourable," he added.

India pays its second largest crude oil supplier through Turkiye Halk Bankasi AS, based in Ankara. Iran accounts for 12% of India's crude oil imports and there are fears that Turkey may come under pressure and stop routing payments.

"Iran is second-largest supplier of crude oil [to India]," Reddy said adding "there will be no energy supplies problems" even in case of shutdown of supplies from the Persian Gulf nation.

Indian refiners are looking at diversifying their sourcing to avoid problems in future.