Western sanctions have hit Iranian oil revenues which have fallen around 45% in the last nine months.
With oil exports accounting for the majority of Iran's revenue, the sanctions crisis is deepening as the oil ministry has stopped selling fuel to some airlines, claiming bills have remained unpaid.
International sanctions, based on a belief that Iran is planning to build nuclear weapons, includes a UN embargo on arms exports and nuclear technology as well as EU bans on most financial transactions as well as the purchase of crude oil. The US prohibits almost all trade with Iran.
New US Treasury sanctions, effective from 6th February, will prevent banks from transferring Iran’s oil revenues from importing nations to Tehran. This may affect India, which could be forced to end the 18-month-old arrangement of paying for Iranian crude oil imports through a Turkish bank.
Iran will have to keep its oil revenues in local bank accounts in the countries which have purchased its oil and can only use the earnings to buy and import “permissible” services and goods, such as food, medicine and basic medical equipment, from those oil customers. However, Iran currently only imports goods from India valued at one-fifth of the revenue it earns from sale of oil.
Additionally, India has not allowed Iranians to invest in its national securities or debt.
Meanwhile, as previously reported, India, China and Turkey continue to import Iranian crude in line with exemption from the sanctions agreed with the Obama Administration.