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Indias Oil Payments

March 7, 2011

This is a WSJ story which I happened upon by searching for something else, but I think its very interesting. India was 2 months behind on hits oil payments to Iran, and they recently settled those payments. Those payments, as far as I can tell, were made in Euro’s. Its no secret that Iran is dealing their oil in non-dollar terms, but I am curious if part of the holdup was Indias reluctance to pay in Euro?

 

It is unclear whether the payments being made are through EIH Bank, which isn’t subject to sanctions by the U.N. or the E.U., but is barred by the U.S. Treasury from conducting any business inside the U.S. The U.S. has also frozen any assets held by it in the U.S. financial system.

It  boils down to India needing the oil, and getting it best from Iran. But the US is making it a real PIA to do so. In the end, India has to get the oil, so its doing what it has to do. Keep an eye on this and deals like it for sure.

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