SBI may not handle Iran oil payments

new delhi — India’s imports of Iranian oil may be hit from end August after the State Bank of India informed refiners it will not handle payments for crude from Tehran from November onwards, the finance chief of Indian Oil Corp (IOC) said on Friday.

The move by the state-controlled bank, India’s biggest, comes after US President Donald Trump pulled out of an international nuclear deal with Iran last month, pledging to reimpose tough sanctions within 180 days.

“(Oil) loading will be affected from end-August under the current mechanism unless a new payment route is established,” IOC’s A.K. Sharma told Reuters in a telephone interview.

Although New Delhi had cut imports from Tehran in 2017/18 due to a dispute over a giant gas field, Iran remained its third-biggest oil supplier. Iran supplied about 458,000 barrels per day (bpd), or about a tenth of India’s more than 4.5 million bpd of imports, in the fiscal year to March 2018.

IOC previously said it would look at buying oil from traditional suppliers mostly in the Middle East to compensate for any cut in supplies from Iran related to U.S. sanctions.

SBI didn’t immediately respond to requests for comment.

India’s refiners currently use SBI and Germany-based Europa-eisch-Iran-ische Handelsbank (EIH) to buy Iranian oil in euros, according to IOC and other companies. Reliance Industries Ltd, owner of the world’s biggest refining complex, plans to halt oil imports from Iran, while Rosneft-promoted Nayara Energy has started cutting purchases from this month, sources previously told Reuters.