India's Essar Oil imported about 5 percent more Iranian oil in August compared with the previous month. Shipments from Tehran jumped about 50.6 percent in the first eight months of the year, data on tanker arrival made available to Reuters showed.
The private refiner imported 103,500 barrels of oil per day (bpd) from Iran in August. This is approximately 21 percent higher than a year ago when imports slowed down due to refiners processing the Iranian oil not being given insurance cover.
Essar shipped 120,000 bpd of oil from Iran between January and August as it boosted purchases in the first quarter to help New Delhi achieve its targeted 220,000 bpd from Iran in the fiscal year ending March 31, 2014.
Indian imports of Iranian oil rose by nearly half to 271,000 barrels per day (bpd) from a year ago in same January-August period, again because of refineries cutting purchases due to worries about insurance coverage for processing crude from Tehran.
Repatriation Remains Problematic
The matter of the repatriation of oil sales from India, 35 percent in Rupee and 65 percent in euro, concerns the Central Bank and not the oil ministry, the oil minister, Bijan Namdar Zanganeh, was quoted as saying, according to IRNA news agency.
The US sanctions imposed on Iran since late 2011, threaten to cut-off the banks of Iran's oil consumer countries from the US financial system unless they significantly reduce the purchase of Iranian oil. The EU has also cracked down on Iranian crude exports.
In February a new round of sanctions was passed, preventing countries that import Iranian crude from paying for the oil using hard currency. They require an already reduced pool of oil importers to pay into locked bank accounts that Iran can only access to purchase non-sanctioned goods or humanitarian supplies in that country.
This has caused India to sharply cut back on purchases of Iranian oil in order to qualify for a waiver from US sanctions. India has nevertheless, remained a major importer under an arrangement in which buyers pay for Iranian crude in part by depositing rupees at the UCO Bank. According to Reuters, rupees are used to pay Indian exporters to Iran against letters of credit opened by Iranian private banks.
Ali Majedi, the former deputy oil minister said that Iran prefers to repatriate oil revenues as soon as possible since the value of the rupee fluctuates and depreciates over time.
India cleared $550 million of its debt in July, as part of the interim deal signed between Iran and the 5+1 Group, which allowed Iran to receive $2.8 billion during the four-month extension of its funds held in foreign banks, in addition to $4.2 billion paid during the January-July period.
Japan and South Korea also cleared some of their oil dues earlier under the payment schedule per the interim agreement.
Japan, China, India and South Korea are the biggest buyers of Iranian crude.
