India Says Preparing for Any Halt in Oil Supply by Iran

Posted July 22nd, 2011 at 12:05 pm (UTC-5)
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India says it is preparing to deal with any reductions in the country's oil supply, after Iran threatened to stop crude exports unless India makes timely payments for the oil.

Indian Oil Minister S. Jaipal Reddy told reporters in New Delhi Friday that the government was making every possible effort to make a payment to Iran. He added that the government is making alternative supply arrangements to prevent a “serious situation.”

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.

Energy-hungry India secures more than 400,000 barrels of crude oil a day from Iran, roughly 12 percent of the South Asian country's oil imports.

Trade between the two countries amounts to $12 billion a year.

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.