Oil Revenues Not Blocked in Foreign Banks

Piled up oil debts are being gradually cleared after the lifting of sanctions in January.
Piled up oil debts are being gradually cleared after the lifting of sanctions in January.

A deputy oil minister announced on Saturday that no part of oil debts to Iran is blocked in foreign countries due to banking problems.

“The only remaining issue is about the way money is transferred via bank channels and the costs of oil exports for Iran that should be alleviated by the banking system,” Amir Hossein Zamaninia, Oil Ministry's deputy for international affairs, was also quoted as saying by IRNA.

Zamaninia added that currently several Asian and European companies are interested in the purchase of Iranian oil and cooperation with Iran in a wide range of fields in the oil industry.

Iran’s Economy Minister Ali Tayyebnia also said this month that the country faces no hurdle in receiving oil revenues.

“Prior to the implementation of Joint Comprehensive Plan of Action, Iran had to pay a higher cost to earn oil revenues, though the country now sells oil without any additional costs,” he said.

According to Tayyebnia, Iran is working with small- and medium-sized foreign banks, but faces problems in banking transactions with large ones, which will be alleviated in the near future.

These clarifications come as opponents of JCPOA are making relentless efforts to undermine the positive effects of the plan on oil revenues.

  Oil Debts Being Repaid

Under sanctions regime, many buyers of Iranian oil could not transfer money to the country due to banking embargoes, resulting in piled up oil debts that are being gradually cleared after the lifting of the constraints in January.

In March, the Anglo-Dutch company Royal Dutch Shell paid €1.77 billion ($1.9 billion) it owed the National Iranian Oil Company.

"Italian oil refiner Saras has also paid €100 million ($112 million) of the total debt (around €350 million) it owes Iran for crude oil it purchased," Ali Kardor, the company's managing director, told Reuters.

It paid a first installment of €50 million in the second quarter and another €50 million in July.

Greece’s biggest oil refiner Hellenic Petroleum paid its first installment in June, which amounted to €100 million.

India is one of the biggest buyers of Iranian crude and built up a payments backlog when Iran was under western sanctions, with its refiners owing about $6.5 billion to Iran.

State refiner Mangalore Refinery and Petrochemicals Ltd paid $500 million while Indian Oil Corporation has settled $250 million through the Union Bank of India.

This was the first payment to Iran by India in the post-sanctions era. 

During the sanctions, around 45% of the impending oil bill were paid in rupees in a UCO Bank account while the rest was to be cleared whenever banking channels open.

Essar Oil, the top Indian buyer of Iranian oil, has in June cleared $500 million of debt owed to Tehran, two sources with direct knowledge of the matter said.

Essar, which operates an oil refinery processing 400,000 barrels per day at Vadinar in Gujarat, owed about $3 billion to Iran.

According to Mehr News Agency, UK's trade envoy to Iran Lord Norman Lamont announced that British Petroleum’s debt to Iran will be paid off Iran's share in Rhum gas field.

BP and NIOC jointly share the Rhum gas field with an equal share distribution of 50%.

Following his April meeting with Lamont, Zamaninia stressed that Britain has pledged to help provide Iran with revenues made from the sale of natural gas from the Rhum gas field in North Sea.