A RBI team will visit Germany this week to explore a new conduit for payments towards Iranian crude oil imports, Oil Secretary S Sundareshan said today.
"The RBI team will be meeting Deutsche Bundesbank officials to find an alternative mode of payment," he said.
There has been no disruption in supplies from Iran since December 23 when RBI clamped down on the main conduit Indian companies use to pay for the consignments.
"Iran has agreed to sell crude oil on credit this month, pending resolution of the deadlock," he said.
Iran is selling crude oil to Indian refiners on open credit after the Reserve Bank of India closed the Asian Clearing Union (ACU) route, a move that effectively bars settlement in US dollars and the euro.
"There is no stoppage of oil supplies. They (Iran) will continue to sell crude based on guarantee from companies to make payments in future," Sundareshan said. "We are hopeful that a specific routing of funds (for oil imports from Iran) will be finalised in next few days."
Mangalore Refinery and Petrochemicals Ltd, the nation's largest importer of Iranian crude oil, and state refiners Indian Oil Corp and Hindustan Petroleum Corp will get some six million barrels of crude on 60 to 90 days' credit.
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.
The two nations have so far not been able to find a solution on how New Delhi should pay for oil imports from Iran after India's central bank said on December 23 that payments to Iran can no longer be settled using a long-standing clearing house system run by regional central banks.
Officials said SBI has refused to route payments through the Hamburg-based EIH Bank, which Iran had identified as a temporary channel for routing money to NIOC.
NIOC has an account in the bank, but SBI felt since the bank is already under US sanctions, its business in America may be affected by dealings with EIH.
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. MRPL buys 7.1 million tonnes of Iranian oil, while IOC and HPCL import three million tonnes each. Private sector Essar Oil imports about 5 million tonnes.