India, Iran scramble to end deadlock over crude oil payments
MUMBAI: India and Iran scrambled to end a deadlock over crude oil payments with their central banks scheduled to meet Friday after recent curbs from New Delhi threatened to disrupt supplies to Asia's third-largest economy.
India is trying to work out an alternative mechanism for payments to Iranian companies after the Reserve Bank of India last week closed the Asian Clearing Union route, a move which effectively stops settlements in U.S. dollars and the euro. Officials from India's central bank, finance and oil ministries, and senior oil industry executives have been locked in hectic negotiations to resolve the impasse.
"The deputy governor of Iran's central bank is coming to meet RBI officials tomorrow [Friday]. Oil companies would also be present there," Oil Secretary S. Sundareshan told reporters Thursday at a hurriedly called press conference in New Delhi. "A decision could be expected in the next few days."
While he didn't name the Iranian official, the Iran central bank website lists Seyed Hamid Pour Mohammadi as the deputy governor.
An email sent to Mr. Mohammadi's office didn't elicit a reply. The rush to end the stalemate highlights the fine balancing act that New Delhi has to maintain between securing its energy needs and its growing proximity with the United States. Iran is India's second-largest supplier of crude oil, after Saudi Arabia. India imports $11 billion of crude annually from Iran-about 14% of its total crude import bill, according to government data. -PB News