After several months of negotiations, Indian refineries have finally begun repaying their oil debts to Iran. These refineries owe Iran nearly $6.5 billion. According to the Indian newspaper 'Luminent', on the eve of Indian Prime Minister Narendra Modi's visit to Iran, Indian refineries have started settling $6.4 billion of their debt to Iran. This debt arose following Western banking sanctions against Iran, which effectively blocked Iran's access to its oil export revenues. The sanctions were lifted in mid-January of this year. Indian refineries have faced difficulties in paying for oil imported from Iran over the past four years. The report cites informed sources stating that the Mangalore refinery has deposited about $500 million and Indian Oil has deposited $250 million into Iran's account over the past two days. The Essar refinery is also preparing to deposit $500 million into Iran's account. All these amounts have been transferred in euros through India's Union Bank to the account of the National Iranian Oil Company at Halk Bank in Turkey. Previously, as sanctions against Iran tightened, India had been sending 55% of the payment for imported oil through this Turkish bank, but new US sanctions in 2013 blocked this payment route as well. The remaining 45% of Iran's oil export payments to India was made in rupees, and Iran could only use this amount to purchase permitted goods from India. After the lifting of sanctions, this is the first round of debt settlement for Indian oil debts to Iran. Mr. Modi is scheduled to visit Iran this Sunday to sign a memorandum of understanding for the development of Iran's Chabahar port. Reuters had previously reported that the central banks of Iran and India had agreed that the $6.4 billion oil debt from New Delhi to Tehran would be settled through European banks. India had reduced its oil imports from Iran like other Asian customers since 2012. However, Reuters writes that this country intends to buy 400,000 barrels of oil per day from Iran for the current financial year starting from April 1.
India Begins Repayment of Oil Debt to Iran
Indian refineries have started repaying a $6.4 billion oil debt to Iran after sanctions were lifted in January 2023. This development comes ahead of Prime Minister Modi's visit to Iran, highlighting a potential thaw in economic relations between the two countries.
👥 Key Players
📰 What Happened
Indian refineries have begun repaying a $6.4 billion oil debt to Iran after the lifting of sanctions in January 2023. This marks a significant step in restoring economic ties between the two nations.
- Indian refineries have deposited approximately $1.25 billion into Iran's account over the past few days.
- The repayment is being conducted through European banks, following the lifting of sanctions.
💡 Why It Matters
📚 Background
India had significantly reduced its oil imports from Iran due to sanctions imposed by the West, which restricted Iran's access to international banking systems. The recent lifting of these sanctions allows for renewed economic engagement.
🏷️ Entities Mentioned
Translated from the original and edited for English readers. View original source →
Translation confidence: 85%