India pays 45% of Iran oil with rupees the rest in Euros
India seeks to pay $6.5 billion to Iran for oil imports
By
Dipanjan Roy Chaudhury
, ET Bureau|
Updated: May 16, 2016, 04.21 AM IST
NEW DELHI: India has approached Turkey's Halkbank to facilitate the payment of $6.5 billion (about Rs 43,400 crore) it owed to Iran for the crude oil imported when western sanctions were in place on Tehran, an Iranian news agency reported.
“The Indian government is seeking to pay the $6.5-billion debt and is looking to prepare the banking activities.
The receiving bank for this money will be Turkey's Halkbank, and the money will be paid in euros,” news agency Fars quoted Indian Ambassador .. Saurabh Kumar as saying in Tehran. Iran has been demanding faster payment of oil dues and in euros. India has put the process into motion ahead of Prime Minister Narendra Modi’s May 22-23 trip to Iran.
During his recent visit, Oil Minister Dharmendra Pradhan had told Iranian officials that India was committed to making the payment as and when banking channels, acceptable to both were available. Mangalore Refinery & Petrochemicals, Essar OilNSE -0.04 %, Hindustan Petroleum, HPCLMittal Energy and Indian Oil had imported Iranian oil when the sanctions were in place.
At that time, India made 45% of the payments in the rupee.
The arrears were to be paid when the banking channels started working for Iran. Although most of the sanctions are now lifted, Iranian banks are yet to be integrated into the global banking system, making payment still a problem. According to sources here, Iran plans to utilise the $6.5 billion to boost its domestic infrastructure besides investments in the energy sector.
Iran says it needs $200 billion worth investments for its energy sector. During Modi’s visit, India is looking to boost its energy partnership with Iran.
After China, India is the second largest importer of Iranian oil and it started buying additional oil post sanctions. The figure reached 5,00,000 barrels per day (bpd) this March, the highest by India from Iran in five years.
India is keen to purchase more from Iran and the PM's visit will focus on this, besides initial pacts on Oil & Natural Gas Corp’s participation in Iran’s Farzad-B gas field and investment in exploration of more fields and downstream sectors, as well as a gas pricing formula.
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China Completes First Physical Delivery For Crude Futures
By
JLC - Sep 12, 2018, 2:00 PM CDT
China concluded the first physical settlement of the Shanghai crude futures contract (SC crude contract) on September 7, 2018, indicating that the newly launched contract has undergone all the trading processes, the Shanghai Futures Exchange said on its official website on September 10.
A total of 601,000 barrels was delivered via the first front-month crude contract on the Shanghai International Energy Exchange (INE), a branch of the Shanghai Futures Exchange, at a settlement price of CNY488.2/bbl ($71.57/bbl). The total value reached CNY293 million on a unilateral basis.
SC crude futures will better serve the physical market
The successful delivery indicates that the Chinese crude futures have passed the market test and are well accepted among industrial participants. It provides a reliable reference for the forthcoming contracts to keep liquid and develop, and will attract more industrial participants, ranging from oil companies and refiners to traders, to use the financial tool to lock in prices for their future physical cargoes.
The delivery process, as an important link between futures and spot cargoes, helps realize the convergence of futures prices and spot prices. The smooth process had set a good example to the subsequent contract trading, participants in the delivery commented.
Some state-run oil companies were heard to have signed long-term crude contracts with overseas suppliers, priced against SC crude futures and in renminbi. The SC crude futures have already begun to reflect physical supply and demand fundamentals and are expected to better serve the real economy.
SC crude futures are gaining momentum
The SC crude futures have already showed strong development momentum though it is only five months since the launch.
As of August 31, INE crude contracts had recorded a total trading volume of 11.09 million lots, valued at CNY 5.39 trillion, and an average daily position of 14,800 lots, replacing DME Oman crude futures as the world’s third largest crude futures contract.
https://oilprice.com/Energy/Crude-Oil/China-Completes-First-Physical-Delivery-For-Crude-Futures.html
We are at the beginning of another manufacturing revolution. Products will be manufactured by robots and automated systems. AI will also oil this revolution and guess which country is leading in this sphere. China too is is trying to catch up. What will happen to cheap wage countries who can offer nothing more than cheap labour.
And for the moron who says payment for oil can only be in dollars
September, 17 2018
India to Revive Rupee Payment for Iran Oil Imports
Sunday, June 24, 2018
India to Revive Rupee Payment for Iran Oil Imports
India is looking to revive a rupee trade mechanism to settle part of its oil payments to Iran, fearing foreign channels to pay Tehran might choke under pressure from US sanctions, two government sources said.
During a previous round of sanctions, India devised a barter-like scheme acceptable to Washington to allow it to make some oil payments to Tehran in rupees through a small state bank.
Iran used the funds to import goods from India, Reuters reported.
“We are looking at reviving rupee mechanism ... We have to prepare ourselves,” one of the sources told Reuters, adding that the current payment mechanism might not work from November.
A commerce ministry official said India’s central bank had yet to decide on moving back to the rupee payment mechanism.
In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the reimposition of US sanctions.
Some US sanctions take effect from Aug. 6 while those, notably affecting the oil sector, will be effective from Nov. 4.
Refiners in India currently use State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros, according to IOC and other companies.
SBI, India’s top banker, has written to the Indian refiners and the government to say it would not be able to handle oil payments to Iran from Nov. 4, an official at SBI said.
India refiners receive a 60-day credit period for payments to Iran, suggesting oil imports from Iran could be hit from August.
The Indian government has not asked its refiners to cut Iranian oil imports, but some firms have started reducing purchases from Tehran.
“So far we don’t know what we are expected to do. We have not asked refiners to cut imports,” the source said, adding that an official meeting between India and the United States to discuss Iran sanctions had not yet taken place.
An Indian delegation visited officials and bankers in France, Germany, Britain and Brussels, the base for the European Union, to find alternative payment routes, the source said, adding that it would be “almost impossible to use European banks for payment to Iran”.
Restarting the rupee payment mechanism would help fix a trade balance that favors Iran.
https://financialtribune.com/articl...-iran-oil-imports?utm_campaign=more-like-this
