India will import crude oil from Iran using a rupee-based payment mechanism, an industry source involved in discussions told Reuters on Thursday.
India, China and Japan are among eight countries temporarily allowed to continue buying Iranian oil as they showed “significant reduction” in oil purchase from the Persian Gulf country after the US reimposed crippling sanctions on Tehran, Secretary of State Mike Pompeo said on Monday.
With the US granting a 180-day exemption on Iranian oil sanctions to India ahead of the restrictions kicking in from Monday, India and Iran are finalising details of a mechanism that will allow New Delhi to pay Tehran entirely in Indian currency, at a bank in India.
With U.S. sanctions on Iran coming into effect on November 4, the global oil trade will surely feel the impact.
An unprecedented volume of Iranian crude oil is set to arrive at China’s northeast Dalian port this month and in early November before US sanctions on Iran take effect, data on Refinitiv Eikon showed on Thursday.
Indian insurers are not offering coverage policies for storage of Iranian oil, an Indian Oil Corp Ltd official said, owing to impending US sanctions on import of crude from Iran, which are expected to kick in on November 4.
Two Indian companies have placed orders to buy Iranian oil in November, oil minister Dharmendra Pradhan said on Monday, adding that India does not yet know if it will be granted a waiver from U.S. sanctions on Iran.
India will buy 9 million barrels of Iranian oil in November, two industry sources said, indicating the world’s third-biggest oil importer will continue purchasing crude from the Islamic republic despite US sanctions coming into force on Nov. 4.
India is committed to buying Iranian oil and continuing the two nations’ economic cooperation, the Iranian foreign minister said after a meeting with his Indian counterpart and ahead of US sanctions aimed at halting Tehran’s oil exports.
India’s government has not told the country’s oil refiners to halt their imports of Iranian crude, a government source said on Wednesday, even as most Indian refiners have cut down their imports ahead of US sanctions on Iran.