Mounting debt led Iran to halt its oil supplies

Posted By: Religare
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Mounting debt led Iran to halt its oil supplies
Following the discrepancies between the India and Iran over Reserve bank of India paying the due for the delivery of 400,000 barrels per day (bpd) or 12% of its crude imports since December 2010 to India by Iran, Iran is likely to stop its further supply to India from August. There is currently a debt of more than $5 billion that is to be paid to Iran for the oil supplies.

Iran has warned Indian oil firms BPCL, HPCL and Essar, through a letter sent on June 27, threatening to stop the oil supply from this August. Therefore, with few days to for July to end, the Indian oil companies are now seeking oil deliveries from Saudi Arabia.

The debt over Iran mounted after Reserve bank of India declined to clear mechanism under the influence of the United States that wanted to Iran to stop its nuclear activity. Iran to this justified that its nuclear activities were solely targeted to produce power and electricity; however, the Western Powers continued to believe that Islamic country focused towards creating nuclear weapons.

However, the India refiners are still waiting for the Iran to take its final call, while the Indian government is waiting for a nod from the US regarding the issue, giving a sigh of relief.

Read more about: rbi, oil and gas, iran
Story first published: Friday, July 22, 2011, 9:30 [IST]
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