India open to all mechanisms to buy Iranian oil

Unfazed by the US and EU sanctions India Thursday said it is open to all mechanisms for payment whatever it takes to buy Iranian oil as it contributes around 12 percent of New Delhis oil imports and its difficult to find replacement on this scale It could include a mix of options that will enable India to buy Iranian oil without violating the UN sanctions highlyplaced government sources told IANS a day after an Israeli website suggested that India has agreed to pay Iran in gold for oil purchases Sources added that India is confident of finding a way out to buy Iranian oil without being seen as breaker of UN sanctions All options are open said sources involved with decisionmaking on this sensitive issue They neither confirmed nor rejected the option of paying for Iranian oil in gold There was however no official reaction to the Israeli websites disclosure Aware of the sensitivity of the issue some Indian authorities have chosen to play it safe calling the report speculative Indian officials who did not want to be identified pointed out that they were working out with their Iranian counterparts on the options they have to make payments toward oil imports We have time till June end to decide on our options and to exercise them an official told IANS In an exclusive report on Jan 23 the website debkacom quoted Iranian sources as saying that India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of US dollars The report which went online soon after an Indian official team visited Iran last week also claimed that China may follow suit noting that India and China buy about one million barrels a day from Iran which amounts to 40 percent of that nations total exports of 25 million barrels per day By trading in gold New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central banks assets and the oil embargo which the European Unions foreign ministers agreed to impose Jan 23 it claimed On Monday European Union foreign ministers had agreed to ban oil imports from Iran from July 1 2012 in an effort to force Tehran from developing its nuclear arsenal Oil imports particularly from Iran are critical for Indias energy security as over 70 percent of oil requirements come from outside the country Iran accounts for about 12 percent of Indias total oil imports Indias Petroleum Minister S Jaipal Reddy Wednesday reacted to the European Unions sanctions against Iran saying New Delhi would continue to explore options for paying Tehran for its oil imports He also noted that India would only abide by the sanctioned imposed by the UN Among the options India is considering for paying Iran is to do business using Indian currency on the lines of the arrangement with Russia in the past A few days ago Foreign Secretary Ranjan Mathai made it clear that India follows the UN sanctions but is not bound by unilateral sanctions imposed by other countries We continue to buy oil from Iran he replied when asked whether India was seeking waiver from the US sanctions cleared on December 31 which seeks to penalise any financial institutions dealing with Irans central bank India has been in a fix for over an year on finding a viable mechanism to pay for Iranian oil after the Reserve Bank of India scrapped the Asian Clearing Union which served as a clearing house for trading with Iran For some time India routed its payments through a German bank and later a Turkish bank but the US sanctions have made these options unviable