New Delhi: India will from November not be able to use European banks for making payments for crude oil it buys from Iran as US sanctions against the Persian Gulf nation take effect, senior officials said on Friday.
SBI, the country's largest lender, has communicated to oil refiners that the euro payment route will be not available after November 3, Indian Oil director (finance) A.K. Sharma said.
US President Donald Trump had last month pulled out of a landmark nuclear deal and said sanctions will be re-imposed on Iran within 180 days.
However, it is not “doomsday” for Indian refiners and alternate crude oil sources in the Middle East, US and Russia can be tapped should Iranian supplies dry up due to payment problems, BPCL director (finance) R. Ramachandran said.
“Once the current payment channel is blocked, supplier (Iran) has to decide if it wants to trade with us in rupee or sell oil on credit in anticipation of channels re-opening in future,” Mr Sharma said.
India pays its third largest oil supplier in euros using European banking channels and imports can continue on alternate modes should it be blocked, he said.
