NEW DELHI: India has asked refiners that owe about $6.5 billion to Iran for oil imports to build up dollar and euro balances to avoid downward pressure on the rupee if six world powers and Tehran reach a final nuclear deal.

Local refiners still owe Iran about 55 per cent of the bill for crude bought since February 2013, when a route to pay for Iranian oil through Turkey’s Halkbank was stopped under pressure from US and European sanctions.

Iran, the US, Russia, China, France, Britain and Germany are trying to end a 12-year-old standoff by striking an agreement that would open the door to lifting sanctions in return for limits on Iran’s sensitive nuclear work.

Once an agreement is reached, Iran would likely ask for payment of its oil dues, India’s oil ministry said in a June 11 letter to refiners that was seen by Reuters.

India, despite agreeing to a US request to curb oil imports from Iran to help force a deal, is keen to rebuild its trade relationship with the Opec member state.

Published in Dawn, July 1st, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play