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India says still buying Iran oil, despite new sanctions

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(NEW DELHI) - India's oil minister said Wednesday the energy-hungry nation was continuing to import oil from Iran and was not bound by new sanctions imposed by the European Union.

The EU agreed earlier this week to an embargo on Iran's vital oil exports as part of an intensifying US-led campaign aimed at forcing Tehran to abandon its nuclear programme.

"We, as a member of the UN, are obliged to follow UN sanctions. Other sanctions imposed by big blocs of countries -- we can have some freedom there," Petroleum Minister S. Jaipal Reddy told reporters in New Delhi.

"As of now, supplies (from Iran) are on," Reddy said, adding that New Delhi was continuing to explore ways to pay Iran for its crude purchases.

An Indian delegation visited Tehran last week, but Reddy would not divulge the outcome of their talks.

Officials say India could pay partly in rupees that Iran could then use to buy Indian imports, but that would not cover the the entire oil purchase bill.

Iran is India's second-largest oil supplier after Saudi Arabia, providing around 12 percent of the fast-growing country's crude needs at an annual cost of around $10 billion.

India currently routes its dollar payments for Iranian crude through a Turkish bank -- an avenue that might be closed off as Washington ratchets up pressure on the Persian Gulf state.

"The Indian government has clearly indicated that they do not intend to order Indian refiners to curtail their purchases" and that it may even increase its purchases, said Greg Priddy, global oil director at Eurasiagroup.

China has also refused to bow to US pressure not to do business with Iran.

India, which imports around four-fifths of its oil needs, has been racing to secure new supplies of oil and gas to sustain its strong economic growth.


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