Published: Sat, September 22, 2018
Finance | By Loren Pratt

Chennai Petroleum cancels Iran oil imports

Chennai Petroleum cancels Iran oil imports

Iran has urged Europe to accept the cost of standing up to US sanction pressures against the Islamic republic.

UCO Bank and IDBI Bank have been identified to route the payment as the two have no exposure to the U.S. financial system.

India may revert to paying Iran in rupees for the oil it buys from its third largest supplier as U.S. sanctions will from November 4 block use of United States dollars to settle such trades, a top official said Thursday.

However, India has been appraising the U.S. about its energy demand to fuel its economy as well as the importance of Iranian oil.

As petroleum-related sanctions on Iran come into effect from November 4, Indian refiners will pay for oil in Indian currency using UCO Bank and IDBI Bank, according to a report by The Economic Times. UCO Bank had in the previous round of sanctions handled rupee payments. Not only is Iran India's second-biggest oil supplier, but India is also the second-top oil client of Iran - the first being China.

India has also been hoping that the United States will give it some relief from the sanctions.

"Chabahar is a very important project for us, not only for access to Afghanistan and Central Asia, but also for Afghanistan itself", he said, adding that the development of the port figured in the high-level talks between India and the United States in New Delhi earlier this month.

Among the financial pathways under discussion in Brussels and other capitals: Devising an alternative - free from USA influence - to the current electronic system used to transfer money from place to place, European officials told NBC News.

The US had promised waivers to countries importing from Iran heavily, if they promise to reduce their imports.

The rupee-rial arrangement was used to buy oil from Iran before sanctions were lifted against it three years ago.

In September, the trend of reduced Iranian oil exports has continued, and analysts expect further cuts from some of Iran's oil customers.

Iran is an important supplier of oil to Japan, accounting for about 5 percent of its crude imports, and Japanese refiners, together with the government, will try to maintain its good relationship with the Middle Eastern country, said Tsukioka, adding that the USA sanctions will not cause a major impact.

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