Essar clears $500mn of Iran oil debts

India’s Essar Oil has reportedly cleared $500 million of a debt it owed to Iran for previous purchases of crude oil.

The announcement has been made by Reuters citing two sources with direct knowledge of the matter.

Essar, which is the largest buyer of Iran’s oil in India, owed about $3 billion to Iran over purchases that were carried out during the years the country was under a US-engineered regime of sanctions.

The same sanctions had blocked the banking channels to Iran thus making payments for trade transactions to the country impossible.

Some of the sanctions were lifted earlier this year thus opening the banking channels to Iran.

Indian refiners have been accordingly settling oil debts to Iran in euros via State Bank of India and Germany-based bank Europaeisch-Iranische Handelsbank AG (EIH).

The total debt by the refiners to Iran stands at around $6.5 billion.

Iran announced in April that it is ready to increase its oil exports to India from the current volume of 350,000 barrels per day (bpd) now that the sanctions that had previously hampered Iranian oil export plans have been lifted.

SS