The National Iranian Tanker Company (NITC), insured by Iranian insurers, has started supplying crude to India and has conveyed to Indian authorities that it would continue doing so in the future as well, an industry source told Sputnik.
"Iran has provided its own cargo ships and insurance to supply crude oil to India. It is a major relief as of now," the source told Sputnik.
Last week, Indian commerce ministry officials had conveyed to US trade representatives in New Delhi that it was not possible for Indian refiners to stop purchasing oil from Iran, citing several reasons. Although the meeting did not provide solutions to India's concerns, India had firmly conveyed that the state-owned refiners were not going to cut imports to zero due to the sanctions.
"Buying oil is a commercial activity and Indian oil importers should continue to import from Iran if ships are available from international ship-owners and oil shipments can find insurers," Narendra Taneja, India's leading energy expert, told Sputnik.
Sputnik discussed the payment issue with several government officials in the last few days and most of them exuded confidence that a solution would be found in the next few days.
During a crucial foreign office consultation that was held in New Delhi on July 16, India and Iran had agreed to maintain the momentum in trade and economic relations despite the threat of US sanctions. India promised to increase its crude oil imports from Iran from 205,000 barrels per day in 2017-18 to 396,000 barrels per day in 2018-19.
Dharmendra Pradhan, India's oil minister, said on Monday that Iran had become the second-largest supplier to India's state-owned oil refiners, replacing Saudi Arabia as the refiners took advantage of steeper discounts offered by Tehran. India's state-owned refiners expanded their oil purchases from Iran between April and June despite the US sanctions on Tehran.