India, Iran crude payments row: Riyadh fishing in troubled waters

Saudi Arabia may be looking to step into an on-going row between India and Iran over delayed payments for supply of crude to Indian refiners, with Riyadh offering to sell additional cargoes of crude to India in case it feels like switching suppliers.

India and Iran are currently in a logjam over the mode of payment for Iranian crude. Outstanding payments to the Iranian national oil company may have touched the $5 billion mark by now, as UN sanctions have made it very difficult for Delhi to route payments to Iran for supplies of Iranian crude.

The matter became particularly tricky as India's central banker, the Reserve Bank of India, blocked payments through the Asian Clearing Union (ACU), an intra-regional transaction clearing mechanism.

According to reports, state-owned Saudi Arabian Oil Co has informed refiners in India it was willing to replace some of the Iranian crude.

Earlier, on 3 July, the National Iranian Oil Co (NIOC) warned some Indian companies about payment delays. India already owed $2 billion to the Persian Gulf state for its unpaid crude bills by 31 May.

A few days later, an Iranian official backed away from threats to cut off crude sales to India, saying exports were continuing. Mohsen Qamsari, NIOC's head of international affairs, said his company had "no intention of halting supplies to the Indian market."