Japan’s oil refiners temporarily halt Iranian loadings on sanctions threat -PAJ

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But the actual volumes imported may be far less as companies like Reliance Industries have totally stopped buying oil from Iran and others too are scaling it down in hope of winning a sanction waiver from the US.

France and Germany, two European countries which are still part of the 2015 nuclear deal with Iran are working out a payment mechanism that will not include the USA dollar in financial transactions with Tehran.

USA sanctions against Iran will come into effect from November 4 and will block banking channels.

They said the European Union has been telling India that it was in the process of coming out with a payment mechanism as using United States dollars for oil transaction will be restricted post-November 4 when the U.S. sanctions come into force. One is how much of Iran's oil China, India, and Europe will buy in October and then in November, when the sanctions kick in.

In the Bush administration and during the Obama administration until the 2015 nuclear deal with Iran, some United States allies, including Japan, South Korea and India, were given waivers from sanctions related to Iranian oil imports.

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India's Chennai Petroleum will also stop processing Iranian crude oil from October to keep its insurance coverage once new sanctions by the sanctions go into effect, three sources familiar with the issue said. It is now seeking support from allies to cut Iranian oil imports to zero soon after the sanction on the petroleum sanction commences in November. It was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11.

UCO Bank and IDBI Bank have been identified to route the payment as the two have no exposure to the USA financial system.

Currently, India pays its third largest oil supplier in euros using European banking channels. UCO Bank had in the previous round of sanctions handled rupee payments.

India wants to secure a waiver for imports from the U.S., which is why it has significantly reduced its oil purchase from Iran after the latter's ties with the United States soured.

The CRS report said that during a visit to India in June 2018, US Ambassador to the UN Nikki Haley said the Trump administration might consider providing exemptions to US sanctions to enable the Chabahar work to continue because the project is vital to Afghanistan's development and reducing its dependence on Pakistan.

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