NEW DELHI: India has made a significant shift in the mechanism for purchasing Iranian oil by opting to pay in Chinese yuan instead of the US dollar, according to a report by Reuters.
The report states that Indian oil refineries purchased Iranian oil during a temporary waiver period granted under US sanctions.According to Reuters, Indian refineries have begun making payments for Iranian oil in Chinese yuan through ICICI Bank, which is based in Mumbai.Citing four informed sources, Reuters reported that the United States had granted a 30-day temporary waiver last month for the purchase of Russian and Iranian oil. The purpose of this exemption was to help stabilize rising global oil prices amid ongoing conflict-related pressures.The report further explained that long-standing US sanctions on Iran have created difficulties in payment systems, prompting many buyer countries to avoid Iranian oil. However, this new payment arrangement is expected to partially ease those obstacles.Sources added that earlier this month, India’s state-owned company Indian Oil Corporation purchased around 2 million barrels of Iranian crude oil worth approximately $200 million. This marks India’s first formal purchase of Iranian oil in seven years.The report also revealed that four vessels carrying Iranian oil for the private Reliance Industries refinery were allowed to dock at port.Reuters noted that both refineries are using ICICI Bank for payments, which is transferring funds in Chinese yuan to Iranian sellers through its Shanghai branch. However, the final identity of these sellers has not yet been disclosed.
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