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India says not told of oil supply halt by Iran
Iran has not formally told India it was halting oil supplies, the Indian oil minister said on Friday, adding New Delhi was making arrangements to meet any "serious situation" following a row over how to pay for the Iranian imports.
July 23, 2011 12:54 by p.deleon
Iran has not formally told India it was halting oil supplies, the Indian oil minister said on Friday, adding New Delhi was making arrangements to meet any “serious situation” following a row over how to pay for the Iranian imports.
Since December, India and Iran have struggled to find ways for New Delhi to pay for imports of 400,000 barrels per day, 12 percent of its oil demand, after the Reserve Bank of India halted a clearing mechanism under US pressure.
That move won praise from Washington, which is using sanctions in a bid to get Tehran to halt its nuclear programme.
Indian firms Mangalore Refinery and Petrochemicals Ltd , Iran’s biggest Indian client, BPCL , IOC , HPCL and Essar buy crude from the Islamic Republic, and their collective debt to Iran since the crisis broke out has risen to more than $5 billion.
None of the five refiners has received a crude supply plan from Iran for August loading cargoes, officials and executives at the companies have said on condition of anonymity.
“We have not received a formal letter, but they are feeling desperate. We are also doing our best to see that the first tranche (of payment) is delivered,” Indian Oil Minister S. Jaipal Reddy told reporters.
“While we are making every possible effort to make a payment to Iran … we are also making alternative supply arrangements. We need to be prepared for a serious situation. Therefore there is no need to worry about the oil supply situation.”
Indian oil firms have parked some money with the country’s central bank to pay for oil supplies from Iran, Oil Secretary G.C. Chaturvedi said on Friday.
India’s immediate strategy to deal with the loss of crude from Iran in August is to buy more fromSaudi Arabia and Iraq, while inventories and plant maintenance give refiners breathing space as they seek to establish new supply lines.
The halt has given regional rival and US ally Saudi Arabia an opportunity to grab a bigger share of the market in Asia’s third-largest oil consumer. If Saudi Arabia fills the gap, tension on oil policy between Riyadh and Tehran could worsen.
“Our search is not confined only to Gulf countries but to other parts of the world. We are looking at all possible options. While trying and hoping for the best in regard to payment to Iran,” Reddy said.
In Tehran, its semi-official Mehr news agency on Friday quoted Mohsen Ghamsari, head ofNational Iranian Oil Company, as saying Iran has no plans yet to cut oil exports to India. (Reporting by Nidhi Verma; Editing by Krittivas Mukherjee)