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Refiners such as Mangalore Refinery and Petrochemicals Ltd (MRPL), which buy Iranian crude oil, may start looking for other supply sources to meet their requirements, including the spot market.
The new financial sanctions by the Barack Obama Government are making it difficult for countries to buy Iranian crude.
MRPL is the biggest importer of Iranian crude oil at about 1,50,000 barrels a day.
Iran is India's second-biggest crude oil supplier after Saudi Arabia, meeting about 12 per cent of the country's import needs.
Though the supplies have not been affected as yet, concerns have been raised following the geo-political situation, sources said.
Looking for new sources would mean the refiners would have to turn to the spot market, as most of the long-term contracts have already been tied up.
Mode of payment
On uncertainty over the mode of payment for the crude oil imports from Iran, sources told Business Line that currently, the mode of payment through Turkish bank is working.
Also, bilateral mechanisms (between buyer and seller) have been proposed for payment and good progress has been made. Sources, however, declined to give details on the mechanism.
Reports indicate that India could be looking at alternatives such as Russia for routing Iranian crude oil payment.
India and Iran have been working out a suitable payment mechanism. Uncertainties over the supplies from Iran emerged when in December 2010, the Reserve Bank of India scrapped the system of payments to Iran using the long-standing clearing house system run by Asian central banks.
The domestic oil refiners could also ask the nodal Ministry, the Ministry for Petroleum & Natural Gas, to seek waiver from the sanctions. Sources said an inter-Ministerial delegation could go to Tehran for deliberations on the issue. The move to send a delegation follows a meeting called by the National Security Advisor, Mr Shivshankar Menon.
The US President, Mr Barack Obama, had signed into law new sanctions against financial institutions dealing with Iran's central bank. The sanctions are part of the US effort to reduce Iran's oil revenue and force the country to abandon its suspected nuclear weapons
Import quantity
India imports about 4,00,000 barrels a day of crude from Iran and the monthly payout is about $1 billion.
According to data available in 2010-11, Indian refiners imported 163.594 million tonnes, with Saudi Arabia being the main supplier. In April-November 2011-12, refiners imported 112.125 million tonnes of crude oil.
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