Asserting that India was not facing any problem in making payments for the import of crude oil from Iran, Petroleum and Natural Gas Minister Jaipal Reddy on Wednesday warned that the country needed to be prepared for all eventualities.

“We continue to be optimistic. Iran continues to be positive. However we have to be prepared for all eventualities,” Mr. Reddy told journalists after inaugurating Oil and Gas Conservation Fortnight 2012 here on Wednesday.

Oil marketing companies (OMCs) are at present making payments through Turkey's Turkiye Halk Bankasi AS, the bank through which India routes payments in euro to Iran for about 3.70 lakh barrels a day of crude oil supplies. “Turkey has informed us that it will not like to open new accounts but continue to service existing accounts through which payments are routed to Iran. Not a single payment has defaulted since India began using the Turkey conduit in July last year,” a senior official said.

U.S. President Barack Obama, on December 31, signed new law measures that denied access to the U.S. financial system to any foreign bank that conducted business with the Central Bank of Iran. The European Union will discuss imposing harsher sanctions on Iran, including a ban on crude imports, in response to the country's nuclear programme when the bloc's foreign ministers meet at the end of this month.

Denying that India had told its companies to stop purchases from Iran, the official said the country would continue to buy crude oil from Iran, but would like to replace a part of the supplies with other sources such as Saudi Arabia. Mangalore Refinery and Petrochemicals Ltd (MRPL), the largest buyer of Iranian oil, at 1.42 lakh barrels a day, and other refiners are yet to renew their term import contracts with Iran for the year beginning April.

Foreign Secretary Ranjan Mathai had stated on Tuesday that India would not seek a waiver from US sanctions to protect its oil trade with Iran. An Indian delegation comprising officials from the Reserve Bank of India (RBI), Petroleum Ministry, Finance Ministry and refiners is at present camping in Tehran to discuss alternative modes and routes of payments.

New Delhi fears Turkey may come under pressure to halt the conduit after the U.S. imposed a fresh round of sanctions against Iran, with the European Union slated to announce tough measures by the end of the month. Sources said the possibility of paying Iran in rupees or through the yen would be discussed at the meeting in Tehran.

Routing payments through Russia was discussed during the visit of Prime Minister Manmohan Singh to Moscow last month. However, Russia has so far not agreed to route payments for India due to the complexities involved.

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