Iran crude oil payment row to be resolved soon

The stalemate over payment for importing crude oil from Iran is likely to be resolved soon as both the countries are exploring a new conduit to facilitate payments, a senior Finance Ministry official said today.

Last month, the Reserve Bank of India had directed that imports of oil and gas from Iran should be settled outside the Asian Clearing Union, a regional payment mechanism between nine nations, including India and Iran.

Under the ACU mechanism, payments can be made either in dollar or euro.

The official said that the discussion has reached the last leg and the ball is now in the court of Iran, who has to decide the banks to facilitate payment.

He said the issue would be resolved shortly, much earlier than March end, and India is comfortable to trade with any convertible currency.

Since the impasse last month, both the countries have been working to arrive at a solution with India sending delegation to Germany and Tehran.

Iran is selling crude oil to Indian refiners on open credit after RBI closed the ACU route.

India has asked Iran to identify a panel of banks, which are not under US sanctions, to route payments to National Iranian Oil Co (NIOC). State Bank of India, the nation's largest lender, is ready to facilitate payments, but is not willing to deal with any bank on the US sanctions list.

Iran is India's second-largest supplier of crude oil, after Saudi Arabia. India imports USD 12 billion of crude annually from Iran -- about 14 per cent of its total crude import bill.