India Pays Iran Two Thirds of Oil Debt: Report

Iran has received "two thirds" of India's 4.8 billion dollar (3.3 billion euro) oil arrears piled up by sanctions-related payment problems, central bank head said Monday on ISNA news agency.

"Two thirds of the oil arrears owed to Iran by India have been received. The rest is on its way and there are no problems in this regard," Mahmoud Bahmani said.

Indian firms struggled for more than six months to pay Tehran as they faced problems linked to U.S. sanctions on Iran over its controversial nuclear program, including measures targeting the Iranian banking sector.

Various Asian and European banking channels used by New Delhi to pay Iran -- Germany in particular -- were closed off one after another, delaying India's settlement.

The managing director of the National Iranian Oil Company, Ahmad Qalebani, said on August 8 India had paid 1 billion euros ($1.4 bn) of the money owed and that oil sales to the country were continuing more or less normally.

Earlier in August, Indian Petroleum Minister S. Jaipal Reddy said his country would use a banking system via Turkey to pay for Iranian crude.

On Monday, Bahmani said Iran faced "no problems" regarding payments for oil sold to China and South Korea, denying press reports of significant arrears owed by these countries to Tehran.

He also said that Iran "if necessary" would accept gold as payment for oil to bypass the banking sanctions imposed by the United States.

India is Iran's second largest client after China, and absorbs about 20 percent of the Islamic republic's crude exports, buying about 400,000 barrels of Iranian crude per day.

Annual oil trade between the two nations stands at an estimated $12 billion dollars.

Tehran has been slapped by several rounds of international economic sanctions over its program of uranium enrichment, which Western powers suspect has a military dimension, despite Tehran's repeated denials.

The United States has also imposed its own unilateral sanctions on Iranian banks, posing risks for foreign companies which deal with them.

Turkey, which has boosted its political and economic relations with Iran in past years, refuses to adopt U.S. and European sanctions against its neighbor, including those targeting the banking sector.