A stalemate in the oil payments dispute between India and Iran continues. A meeting on Friday between Reserve Bank of India (RBI) officials and their Iranian counterparts did not arrive at any decision. However, the talks will continue.
An RBI statement after the meeting said the meeting was held at a technical level to discuss various modalities to facilitate future trade transactions with Iran, including oil.
Earlier, Iran’s semi-official Fars news agency had quoted Iran’s Deputy Oil Minister, Ahmad Khaledi, as saying that the dispute has been resolved by changing the currency of settlement, which would preserve a trade in crude worth $12 billion a year.
“By changing the currency for oil transactions between Iran and India, the problem has been solved,” Khaledi was quoted as saying.
RBI said last week that oil payments to Iran could no longer be settled using a long-standing clearing house system run by regional central banks. Tehran has refused to sell oil outside the nine-member Asian Currency Union, wherein transactions are netted on a multilateral basis, rather than transaction by transaction. The ACU uses the euro and dollar for settlement.
This week, RBI extended the move to apply to all current account transactions. The White House, which wants governments to stop dealing with Iran because of its nuclear programme, praised the move. It came less than two months after US President Barack Obama’s trip to India, during which he pledged to help boost New Delhi’s global role.
“In order to not allow Americans and Europeans to create any problem, we said let's do our business in other currencies like the (Emirates) dirham or (Japanese) yen,” Khaledi was quoted as saying.
Indian officials and traders had been hopeful of a quick resolution to the payments row that could have disrupted about 13 per cent of the country’s oil imports and left refiners scrambling for expensive alternative sources of crude.