U.S. sanction to bar transfer of oil import payment to Iran
New Delhi, India (4E) – A new U.S. Treasury sanction against Iran that will take effect on Feb. 6 will prevent countries importing Iranian oil from transferring payment to Tehran.
The sanction contained in a law passed last year requires banks to keep payment for Iranian oil import in its territory or country and only allows its use by Tehran for purchasing permissible local goods, such as wheat and medicine, for shipping to Iran.
The sanction prevents Iran from using hard currency in boosting its economy now reeling from international sanctions in response to its nuclear program.
India is expected to benefit from the new sanction by increased trade with Iran. India has been importing Iranian oil since 2011 and part of the payment is in rupees deposited to National Iranian Oil Company’s account with Kolkata-based UCO Bank.
The account has accumulated an equivalent of $2.6 billion, which the Iranian oil company does not know how to use.
Indian and Iranian officials are discussing payment schemes in response to the upcoming sanctions.