A senior official at the National Iranian Oil Company (NIOC) said today that Iran will not cut supply of oil to India in August. Mohsen Ghamsari, NIOC director of international affairs, told Oil Ministry’s website SHANA that despite NIOC’s warnings to Indian refineries over their failure to make payments of over $2 billion, Iran has no intention to cut its exports to India.
“A warning has been sent to those refineries that are debtors but sending such a letter does not mean Iran's oil exports have been cut and we have no intention to cut our exports to the Indian market,” Ghamsari said [SHANA, 3 July].
In the letter to Indian refiners, Iran threatened to halt oil supplies in August unless a resolution to the problem was solved. On Saturday, the news made headlines in major Iranian newspapers, including Kayhan. Ghamsari’s interview with SHANA was apparently meant to leave options open to Iran if the payments could not be made by August.
India is Iran’s second largest customer for its crude oil. Cutting off supplies to India would be problematic to Iran especially in the light of current reports that India’s largest supplier, Saudi Arabia, has indicated its readiness to increase it exports to the country by some 2.5 barrels a day to offset any loss in the Iranian supply. Iran could be looking for some forms of barter trade and credit arrangement with India to accept Indian goods for its oil in lieu of cash payments.
Ghamsari said he was optimistic about talks with India.
“The talks with the Indians are still under way, and considering our country's good relations with India, we are hopeful that this problem gets solved as soon as possible.”