Banks making it harder to buy Iran's oil
Image via WikipediaNY Times:
Officials in India and Iran scrambled Thursday to keep the $11 billion in oil and gas trade between them going after India’s central bank declared last week that a regional clearinghouse could no longer be used to settle such transactions.One of the reasons supplies are tight is this administration is strangling the domestic production of oil. It is not approving permits in the Gulf of Mexico or in Western states in federally owned land. This anti energy policy is bumping up against its policy of thwarting Iran. Don't look for common sense to overcome Obama's carbon phobia.
The move, which was long sought by the United States as a way to tighten sanctions against Iran, makes it tougher for Indian companies to buy Iranian oil and gas because they can no longer use the Asian Clearing Union, which was set up by the United Nations in the 1970s to ease commerce between Asian countries, to handle payments.
The clearinghouse allowed Indian companies to pay Iranian companies via the two countries’ central banks. But it also meant that the transactions were less transparent, making payments to companies linked to Iranian companies controlled by groups banned under the sanctions regime more obscure.
Central bankers from both countries were preparing to meet Friday to resolve the impasse, officials in India said.
Weaning India off Iranian oil is particularly difficult now, as supplies are tight, prices are high and India’s government is eager to cut subsidized prices its citizens pay for petroleum products.
India imports about 350,000 to 400,000 barrels of oil a day from Iran, about 15 percent of its total crude imports. Much of that crude is imported by India’s state-owned oil companies, because private oil companies in India that were reliant on Iranian imports have pared back their imports in recent years, under pressure from the United States.