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Sanctions affect oil payments to Iran

Sanctions affect oil payments to Iran
The Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) is shown in the Arabian Sea on January 19, 2012, before transiting through the Strait of Hormuz without incident on January 22, 2012. The EU banned oil purchases from Iran on January 23, 2011. Iran has said it may blockade the Strait of Hormuz, but the U.S. Fifth Fleet has said it will not allow this to happen. UPI/Will Tyndall/U.S. Navy | License Photo

NEW DELHI, Jan. 25 (UPI) -- The Iranian government said it wanted India to pay for crude oil with the Chinese yuan to circumvent additional economic sanctions.

European and U.S. governments have targeted Iran's energy sector and central bank with economic sanctions as punishment for a controversial nuclear program. There are concerns that Iran is working on technology needed to produce a nuclear weapon, though Tehran maintains its intentions are peaceful.

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New Delhi last week said it would use the rupee to pay some of its oil debt to Iran, the second-largest oil supplier to India. Tehran, however, said it was worried about the value of the rupee and asked for a partial payment in yuan, Bloomberg News reports, citing three sources who provided information on condition of anonymity.

New Delhi had paid about $1 billion per month through Turkish channels for the estimated 370,000 barrels per day of Iranian crude.

The Reserve Bank of India in 2010 expressed reservations about Iranian transactions. Russian officials last month said they didn't want to process the transactions because of the complexities involved.

Authorities in India said, however, they didn't fear a major crisis unless Iran decided to close shipping lanes in the Strait of Hormuz, something Iran has never done.

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