Iran ends free Oil shipping deal with India

Iran has ended its free shipping of crude oil to India. It has ended a three-year old system of getting paid for half of the oil dues in rupees.

Iran is now insisting on being paid in Euros for the oil it sells to Indian refiners. It also wants refiners like Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MPRL) to clear nearly USD 6.5 billion of past dues in Euros, officials said.

Iran had in November 2013 offered free delivery of crude oil to Indian refiners as tough Western sanctions crippled its exports. With shipping lines refusing to transport Iranian crude for fear of being sanctioned, Iran used its shipping line for the delivery and did not charge for transportation.

However, the country will continue to ship the oil in its tankers but will charge a discounted tariff. The transportation fee will for now be less than half it takes to ferry oil from Iran.

Image credit: Indiatimes