Iran is exporting oil to India despite receiving no payment for months, to protect its market share from price-cutting competitors such as Saudi Arabia, its OPEC governor Mohammad Ali Khatibi said yesterday.
India owes Iran billions of dollars for oil imported in the months since India banks blocked transfers of money to the Islamic Republic under pressure from Washington.
Indian buyers have been paying the billions they owe into a joint bank account that Iran cannot access since the Reserve Bank of India ended a regional clearing mechanism in December 2010, but Iran will keep sending crude anyway so rival suppliers do not take more of Asia's third biggest consumer.
"Customers are paying into this joint account but the account is controlled by the Indian government so the funds can't be transferred," Khatibi said.
Khatibi said Iran hoped to eventually get paid from the joint account when its bank transfer problem is resolved, giving no indication of how much crude Tehran was prepared to send India without seeing a cent.
He told Iran's Sharq daily newspaper that Iran was keeping up exports without payment to defend its market share and accused rival exporter Saudi Arabia of trying to grab more of the global oil market by cutting its prices and increasing output.
"It seems that Saudi Arabia's actions in the oil market have the smell of competition," Khatibi said.
"Moves undertaken by Saudi Arabia now demonstrate that there is no demand for [additional] oil," Khatibi was quoted as saying."They are after securing other producers' [market] shares."
He said the Saudi move to boost exports was politically motivated and should be met with a political response.
"If Saudi Arabia in its recent moves in the oil market is after political goals then the rules of the game are political and the answer should be a political one too."
