New Delhi: India has resolved an oil payment dispute with its second biggest supplier Iran through bilateral negotiations and agreed to settle the outstanding bills as soon as possible, officials said.
"Following bilateral negotiations, the two sides agreed to settle the outstanding bills as soon as possible," Ahmed Qalebani, managing director of National Iranian Oil Company, was quoted as saying by the Iranian oil ministry website Shana.
Iran, which exports nearly 400,000 barrels of oil to India each day, had threatened to cut off supplies if the payment dispute was not settled by August 1.
Iran had threatened to cut off supplies if the payment dispute was not settled by August 1.
Iran is the second biggest supplier of crude oil to India after Saudi Arabia. Nearly 12 per cent of India's oil demand is met by Iran.
Another senior official of the Iranian oil ministry said Iran had continued exporting oil to India despite the payment row.
The two countries have agreed to settle the payment row in two phases. In the first phase, India will pay arrears within the next few days and then gradually clear the remaining dues in the next phase.
"The two sides have reached an agreement on the arrear payments," said Mohsen Qamsari, director for international affairs at National Iranian Oil Company.
"Related bank accounts have been announced to Indian side and the amount deposited in our accounts would be revealed by reopening the international banks Monday," Qamsari said.
India has not made payments for oil shipments from Iran for the past few months and around $ 7 billion are pending to the Iranian oil companies.