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SBI to stop handling Iran oil payments
Why it is in news?
- India’s imports of Iranian oil may be hit from the end of August after the State Bank of India (SBI) informed refiners it would not handle payments for crude from November.
- The move by India’s biggest bank, comes after U.S. President Donald Trump pulled out of an international nuclear deal with Iran last month, pledging to reimpose tough sanctions within 180 days.
- Although New Delhi had cut imports from Tehran in 2017-18 due to a dispute over a giant gas field, Iran remained its third-biggest oil supplier.
- Iran supplied about 458,000 barrels per day (bpd), or about a tenth of India’s more than 4.5 million bpd of imports, in the fiscal year to March 2018.
- India’s refiners currently use SBI and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros.
- India has said it does not follow U.S. sanctions, but companies and banks with links to the U.S. financial system could face penalties if they do not comply.
- Iran offers Indian refiners a 60-day credit period on oil sales. Analysts contend Iran may have to offer more incentives to protect its oil sales to India.
Source
The Hindu