Iran Warns India on Crude Supplies in Payment Dispute

Posted July 19th, 2011 at 9:40 am (UTC-5)
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Iran’s foreign ministry says Tehran may stop its oil exports to India if the South Asian nation does not make timely payments for the crude.

Foreign Ministry spokesman Ramin Mehmanparast said Tuesday India’s inability to pay for Iranian oil will “negatively impact” the two nations’ annual trade, which amounts to $12 billion.

Iran’s central bank says India owes it $5 billion for oil deliveries in recent months. India has suspended payments for Iranian crude in response to U.S. sanctions on banks doing business with Iran.

India and Iran have been trying to negotiate alternative payment mechanisms.

Washington has imposed financial sanctions on Iran for pursuing nuclear activities that Western powers suspect are aimed at developing nuclear weapons, a charge Tehran denies.

Iran’s semi-official Fars news agency said Monday an unnamed Iranian oil official warned that oil exports to India may be suspended from August 1 if the payment dispute is not resolved. Energy-hungry India secures about 12 percent of its oil imports from Iran.