Iran on 15 July 2013 agreed to take payments for oil it sells to India entirely in rupees after US and western sanctions blocked all other payment routes. India has been, since July 2011, paying in euros to clear 55 percent of its purchases of Iranian oil through Ankara- based Halkbank. The remaining 45 percent due amount was remitted in rupees in accounts Iranian oil company opened in Kolkata-based UCO Bank.
Iran explored taking 55 percent payments in Russian Ruble and other currencies but the payment routes could not be finalised due sanctions against the Persian Gulf nation. Iran has now agreed to take all of their payment in Indian rupees. As the euro route was blocked and Iran did not indicate an alternate mode of taking payment for 55 percent of the oil it sold to Indian refiners, over 1.5 billion US dollars in dues got accumulated.
Iran agreed to take this overdue amount in rupees. India, which in June 2013 won another 180-day waiver from the US sanctions after it cut crude oil imports from Iran by over 27 percent, has not bought a single barrel of oil from the Persian Gulf nation since April as insurance firms refused to provide cover to refiners processing Iranian oil.
India had in 2012-13 imported 13.14 million tonnes of crude oil from Iran, down from 18.11 million tonnes of 2011-12. Iran was till 2010-11 India's second largest supplier after Saudi Arabia but has since slipped to the sixth place. In 2012-13, Saudi Arabia followed by Iraq at 25.05 million tonnes, Venezuela 21.80 million tonnes, Kuwait 19 million tonnes and UAE 14.71 million tonnes were major oil suppliers to India.