DEHAI NEWS MAILING LIST ARCHIVE: [dehai-news] Oil cos may route Iran payment via 3rd country

[dehai-news] Oil cos may route Iran payment via 3rd country

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From: wolda002@umn.edu
Date: Sun Jan 02 2011 - 14:56:10 EST

Oil cos may route Iran payment via 3rd country Surojit Gupta & Sidhartha,
TNN, Dec 31, 2010, 06.39am IST
NEW DELHI: India <http://timesofindia.indiatimes.com/topic/India> and
Iran <http://timesofindia.indiatimes.com/topic/Iran> will try to resolve the
issue of payments for Iranian crude by domestic oil
firms<http://timesofindia.indiatimes.com/topic/search?q=domestic oil
firms>by opting to route it through a third country.

Officials say this is one of the options being actively considered as a way
out of the impasse which has made oil companies nervous about supplies from
Tehran. "There are some countries which have not succumbed to US pressure.
So there is the option to transfer money through banks in
China<http://timesofindia.indiatimes.com/topic/China>and Japan," said
a source who was involved in the discussions between the
government, RBI, oil companies and banks. The source, however, said the main
option being explored by the government was to enter into an arrangement
similar to the rupee-rouble trade with the value of the Indian currency
pegged to the Irani rial in this case.

The government and
RBI<http://timesofindia.indiatimes.com/topic/search?q=RBI>would,
however, need to resolve the situation where there is an
inter-governmental agreement on the issue, as is being demanded by Tehran.
Besides, the terms of trade are heavily loaded in favour of Iran given that
India imports large quantities of crude from the West Asian country while
New Delhi's exports primarily comprise tea and rice. As a result, during the
first quarter of the current fiscal, trade deficit with Iran widened to
around $2.4 billion from around $2 billion during April-June 2009-10.
India's imports from Iran, comprising mainly of crude oil, was estimated at
around $2.7 billion during April-June this year.

The share of Iranian crude in India's total imports was estimated at around
12%, next only to Saudi
Arabia<http://timesofindia.indiatimes.com/topic/Saudi-Arabia>.

RBI deputy governor Shyamala
Gopinath<http://timesofindia.indiatimes.com/topic/search?q=Shyamala
Gopinath>will discuss the payment settlement options with her
counterpart from Iran
over the next few days. In addition, Indian bankers and officials would
visit Tehran <http://timesofindia.indiatimes.com/topic/Tehran> next month to
thrash out a solution as payments for imports that have already taken place
are stuck with Indian banks.

The genesis of the problem lies in a notification issued by RBI last week
which put curbs on settlement within the Asian Currency Union. As a result,
Indian oil importers are unable to pay for crude imports in either US
dollars or euro. The move, which came under US pressure over Iran's nuclear
ambitions, won praise from Washington on Wednesday but is now taking
political overtones with the Left parties criticizing the move.

In 2006, the US had imposed sanctions on a bank in Macau, accusing it of
laundering money from North Korea. The move resulted in freezing of $24
million from North Korea.

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