Indian refiners completed payment of $900 million in frozen oil revenues to Iran on Wednesday under an interim deal that eased some sanctions against Tehran over its nuclear energy program, said Indian sources to the Times of India.
“The first installment of $400 million was cleared last month and today the Indian companies paid the second installment of $500 million,” said one of the sources.
In the second installment of $500 million, Mangalore Refinery and Petrochemicals and Essar Oil paid around $220 million each, Indian Oil Corporation about $60 million and Hindustan Petroleum Corp about $5 million, according to the sources.
Indian refiners settle 45 percent of their oil payment to Iran in rupees through a local bank, while they continue to hold on to the remainder that are remitted to Tehran under an interim nuclear deal reached between Iran and the P5+1 – the US, Britain, France, Russia, China and Germany, in November 2013.
Iran uses the revenue in rupee accounts to pay for imports like rice and pharmaceuticals from India.
The payments are made using an existing mechanism based on a series of back-to-back transactions in different currencies that are initially channeled through the Reserve Bank of India. Iran then gets the payment in a Dirham account from the United Arab Emirates’ central bank.
Iran’s biggest oil clients - China, India, Japan and South Korea - imported 6.6 percent less in September than a year ago, the first on-year decline since December, but shipments rose back above the one million barrel per day mark allowed under the interim deal that eased western sanctions.
