Although oil sanctions come into effect on 4 November, US threats have pushed European and Asian buyers (especially in India and Japan) to cut their purchases.
The Trump administration had withdrawn from a nuclear accord signed by Barack Obama in the month of May and had ordered first round of sanctions on Iran from August 6.
India is in touch with both Iran and the USA regarding its oil imports from Iran and the issue was brought up in the recently held 2+2 dialogue between New Delhi and Washington. India has increased oil purchases from Iran to almost pre-2012 levels after sanctions were lifted, and in May 2016 India agreed to transfer to Iran about $6.5 billion that it owed for Iranian oil shipments but which was held up for payment due to sanctions, it said.
Elsewhere in his remarks, the ambassador pointed to the Joint Comprehensive Plan of Action and said, "South Korean government will strongly back JCPOA, because, we are of the opinion that JCPOA will secure and guarantee peace and security in the region and world in particular".
Less than 50 days after the second batch of United States sanctions against Iran came into effect, Iran's oil exports have dropped substantially, causing "severe economic damage" to Iran, Bloomberg reports.
The port facilitates access to Afghanistan by bypassing Pakistan and is also a vital link in the International North-South Transport Corridor. India has been working through diplomatic channels to look at the U.S.to grant exceptions from the upcoming sanctions.
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Sources said that the 28-nation bloc European Union has conveyed New Delhi that they were in process of devising a payment mechanism as U.S. dollars for oil transaction will be restricted post November 4 when the USA sanctions come into force.
Oil refiners such as state-owned Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) could use UCO Bank or IDBI Bank to route oil payments to Iran, the official added.
The surge in Iran exports during May, June and July cut Japan's January-July decrease in Iranian oil imports to just 1% year on year, compared with a cumulative 13% drop over January-April.
Till now, the 28-country bloc has not put forward a compact proposal for making payments to Iran for buying of oil. SBI has told refiners it would stop handling Iran payments from November.