UN sanctions do not prohibit oil buy from Iran: RBI
Friday, 24 February 2012 | 00:00
RBI has said UN sanctions do not prohibit India from purchasing crude oil from Iran, which is facing tough US and European sanctions over its nuclear programme.
"India is conforming to the UN sanctions as far as dealings with Iran are concerned and UN sanctions do not prohibit purchases of oil from Iran," RBI Governor D Subbarao told The Wall Street Journal Online edition.
On payments for crude oil purchases from the Persian Gulf nation, he said, "as much as we purchase oil from Iran, we've got to find a way to pay for it and our effort has been to continue to make our payments".
Iran had last month agreed to receive 45 percent of the payments, for about 370,000 barrels per day of oil it sells to India, in rupees, via an account opened in the Kolkata-based UCO Bank. It was chosen because it has no US or European exposure and thus would not be impacted by sanctions.
Iran is India's second largest oil supplier accounting for 12 percent of its needs.
Subbarao further said oil prices are a big factor and largely beyond India's control.
"And then there are the political factors, which is Iran. If Iran is outside the world pool there could be price pressures. If Saudi Arabia because of fiscal concerns, its commitment to extend fiscal supports to other Arab countries, to meet that commitment they might want to keep oil prices at a certain level," the RBI chief said.
India import 80 percent of its oil requirement.
European Union, which had followed the US in imposing sanctions on Iran to deter it from developing nuclear weapons, had announced it will not buy any crude from the Islamic nation from July 1.
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