NEW DELHI: India has back-up plan to cope with a halt to crude supplies from Iran, oil minister S Jaipal Reddy said, as the Islamic republic upped the ante in an oil payments row and Indian refiners rushed to secure alternative supplies, including from Saudi Arabia.
Since December, India and Iran have struggled to find ways for New Delhi to pay for imports of 400,000 barrels per day or 12% of its oil demand after the Reserve Bank of India halted a clearing mechanism under US pressure. That move won praise from Washington , which is using sanctions in an attempt to get Tehran to halt its nuclear programme.
Indian firms Mangalore Refinery and Petrochemicals Ltd , Iran’s biggest Indian client , BPCL , IOC , HPCL and Essar buy crude from the Islamic Republic, and their debt to Iran since the crisis broke out has risen to $5 billion.
None of the five refiners have received a crude supply plan from Iran for August loading cargoes, officials and executives at the companies said on condition of anonymity . But Indian oil minister said on Thursday no oil shortages would result from Iran’s halting supplies in August. “No. There will not be any shortage or problem. We have a back-up plan,” Reddy said.