Mumbai: Indian refiners paid €1 billion (Dh5.25 billion) to partially clear debt on crude oil purchases from Iran, which will now resume shipments to the Asian nation, two people with knowledge of the matter said.

The money was routed through Istanbul-based Turkiye Halk Bankasi AS, said the people, who declined to be identified because they aren't authorised to speak with the media. Payments were made by Mangalore Refinery and Petrochemicals Ltd, Essar Oil Ltd and Hindustan Petroleum Corp.


Refiners in India have faced difficulty in finding banks to transfer payments for oil purchases from Iran, which is constrained by international sanctions over its nuclear programme. India owes $5 billion (Dh18.37 billion) for crude, Iranian central bank governor Mahmoud Bahmani said on July 18.

U.K. Basu, managing director of Mangalore Refinery, S. Roy Choudhury, chairman of Hindustan Petroleum and Manish Kedia, an Essar spokesman, were unavailable for comment.

Istanbul-based Turkiye Halk Bankasi complies with United Nations resolutions on Iran and doesn't step outside them, an official for the state-owned bank said by telephone yesterday on condition of anonymity because he isn't authorised to speak to the media. The official declined to confirm or deny any transaction, citing confidentiality rules.

The gridlock, which started in December when India's central bank scrapped a mechanism to pay for oil in euros and dollars, threatened $9.5 billion in trade between the nations.

Iran didn't give Indian refiners loading dates or shipping amounts for August, three people familiar with the matter said on July 20. This information is typically provided by the middle of the previous month, they said.


Indian refiners, seeking to end the impasse, opened accounts with state-owned Union Bank of India Ltd to route money through a lender in Turkey as an experimental option, two people with direct knowledge of the matter said on July 29.

India in February arranged for State Bank of India, the nation's biggest lender, to help in making payments through Hamburg-based Europaeisch-Iranische Handelsbank AG, only to voluntarily halt that agreement in April.