18:38 GMT +328 September 2016
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Euro and United States 100-dollar banknotes and Iran's rial banknotes

Iran Dumps Dollar in Foreign Oil Sales

© AFP 2016/ ATTA KENARE
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Iran has switched to euro in its foreign oil trade, in a bid to cut reliance on the US dollar. After the removal of sanctions, Tehran would also want to recover in euros some of its previously frozen assets.

Iran has turned away from the US dollar in oil trade and is denominating in euros all new and outstanding oil contracts with companies, including French oil and gas giant Total, Spanish refiner Cepsa and Litasco, the trading arm of Russia’s Lukoil, a source at National Iranian Oil Co told Reuters.

"In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery," the source said.

Lukoil and Total declined to comment, and Cepsa did not respond to a request to comment.

Iran has also told its trading partners who owe it billions of dollars that it wants to be paid in euros rather than US dollars.

The source explained that Iran’s central bank adopted a policy to carry out foreign trade in euros while the country was under sanctions.

"Iran shifted to the euro and cancelled trade in dollars because of political reasons," the source underscored.

Iran was allowed to recover some of the funds frozen under US sanctions in currencies other than dollars, including the Omani rial and UAE dirham.

According to US officials, nearly $100 billion of Iran’s assets were frozen abroad, and around 50 percent of them Tehran was able access after the removal of sanctions.

Sanctions against Iran were lifted on January 16, by both the US and the European Union. The move came amid oversupply in the global oil market, with the Organization of the Petroleum Exporting Countries (OPEC) refusing to cut down its daily output.

It is not clear how much of the funds are oil dues that Iran wants back in euros. For instance, India owes Tehran around $6 billion for oil supplied during the sanctions years.

"Ditching the dollar, Iran and India have agreed to settle all outstanding crude oil dues in rupees in preparation to future trade in their national currencies. The dollar dues […] would be deposited in National Iranian Oil Co account with Indian banks," The Indian Express recently reported.

For many years, Iran has pushed to replace dollar with euro in international oil trade. In 2007, Tehran failed to persuade OPEC to switch away from the US dollar which then-president President Mahmoud Ahmadinejad called a "worthless piece of paper."

Switching oil sales to the euro makes sense for Iran since Europe is its major trade partner. In late January, The Wall Street Journal reported that Iran had agreed to lower price of its crude for Europe, following a similar move by Saudi Arabia. At the same time, Tehran increased crude prices for Asia.

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oil trade, euro, dollar, OPEC, United States, Iran
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  • anne00marie
    Those sanctions are a two edged sword and as Washington DC is finding out, can be quite powerful when the boot is on the other foot.
  • Missy Xin reply toanne00marie(Show commentHide comment)
    anne00marie,
    The US is a dying empire, the question is will they lash out before they're finished? Or accept their fate and go quietly?
  • peaceactivist2
    This layman has a hard time understanding this dumping dollar trading business. When you said you dump the dollar in favor of the euro? But don't you also have to figure the trading of the oil based on the dollar, isn't it? Say Iran sell her oil to the poorest nation on earth - Laos. Iran would can't just say, oh, my oil is 100,000 kip per barrel because this trade is just between you and me. Or this trade is base on your ability to pay, or my ability to discount for you. The fact is Iran has to offer the price at current oil market value, that is in dollar term, then covert into Laotian money. If so, there is no differences between holding the dollars on your hand or the value of the dollars on the trades. Regardless, the dollars still has to be used as the world trading value. So what is the big deal about excepting 397,600 kips on your hands compare to accepting a $50 bill on your hand for one barrel of oil?
  • teddy j
    ''hello world -- who wants to trade with US in OUR dollar currency? ''
    so says UNCLE SAM - some years from now...

    "we'll even LIFT SANCTIONS AGAINST those of you we sanctioned- if you trade with us and each other in OUR dollars"...

    ;silence...

    "dam mit - WORLD !!! we're asking an important question here!!! why isn't anybody LISTENING? WE'RE AMERICA!!! TRADE WITH US IN OUR DOLLAR!!!"

    silence -- except FAR AWAY -- Across the world's two greatest oceans -- lots and lots of humming -- TRADE IN CURRENCIES -- but no dollah............
  • teddy jin reply toanne00marie(Show commentHide comment)
    anne00marie,

    CAN NOT be said any better, anne00marie !!
  • teddy jin reply toanne00marie(Show commentHide comment)
    anne00marie,

    we can be sure of one thing:

    remember what was done to libya and iraq -- when they announced trading in other than dollars...........destroyed...

    there will be NO repeat in IRAN - we can no be quite sure of that.

    1 ) iran IS far more prosperous and independent and capable WITHOUT american ``technology`- despite the mosT BRUTAL regime of sanctions imposed on any country really. that was so prolonged..
    2) iran has a population LARGER than either libya or iraq were before their destruction
    3) with a far more capable and highly disciplined and experienced military (the largest really in the middle east) - and a security regime that is second to none

    4) has a consistently proven position of independence after the horrors of the shah regime under american control - and therefore a long, long memory

    5) has a population that has been quite literally the most high-educated and professional class as well as entrepreneurship capabilities...(iran does have some of the most competitively advanced global web technologists - as can immediately already be seen with their high quality webs services -- just check online)

    6) enormous territory with great variation and resources - from agriculture to minerals , oil and gas

    7) a strong construction-engineering industry
    8) expert, professional diplomats and industry leaders..

    and a FIERCE sense of independence -- being SHIITE as part of that sense of independence

    *the last part was explained to me by a dear friend -- a persian with some russian-french heritage in her - mathematician, composer , pianist and architect (that`s how educated iranians can be) -
    and said that being shiite was partly a conscious choice by iranians to ``embed`` within islam their iranian character ...

    in its own way no different than the ``protestant work ethic`` america..
    or the ``catholic italy from roman times```..or anglican church for ``english britain``..

    or the way the irish are mostly catholic to keep themselves ``separate`` from britain -- or russians have orthodox...etc..
  • Roland Viktor... what's the difference between toilet paper (some calls it Black Gold) and Gold..? When the BG flows.. there's value in it with more toilet papers being printed.. but when it falls.. it becomes.. just like ordinary toilet papers for wiping our "S.. es.. hehehe.. Just remember.. it's.. Dinar=Gold.. and Rial=Silver are the real currencies.. and why do you think Ancient Empires are dealing with Gold.. and/or Silver..? Btw.. where are the most gold of the world are kept now..? Wrong.. not in the US..!
  • v76
    It begins, put that in yer pipe and smoke it murika :)
  • Mitach2002
    More nations need to do this. Time to stop supporting Americas never ending debt limits
  • Jet fuel can't melt steel beams
    Nice stop that oppression with the us money!
  • cast235
    Another nail on the coffin.
    Russia should do it's trade and energy sales in Ruble. To give some elasticity to it.
  • cast235in reply topeaceactivist2(Show commentHide comment)
    peaceactivist2, Their idea is to remove the DOLLAR from world currency. And as a trade factor. That is the bread and butter of the DOLLAR. De dollarization, will mean that at the trade baskets dollar will lose value, when is in less demand. Yes, west will rig the numbers. But the Ponzi goes so far.
  • jimbogoofball
    Is this now official or is it still being talked about like it has been for the last years? I have seen different versions of this story today and have so far not seen anything concrete or confirmed to be true. So pardon my ignorance but is this really true? I sure hope it is true. It will be ggggggggggggggggggggg ......great to see this really happen. I also wonder will u s a have the jam to bomb them? I doubt it myself because the Persians can fight back just like MISTER PUTIN does. Go SCO and destroy the economies of the west. Can't be soon enough. LOL LOL LOL LOL LOL
  • michaelin reply toteddy j(Show commentHide comment)
    teddy j, thanks for that, I think it's always important to know what people in the area believe and how they see life etc. :)
  • michaelin reply to (Show commentHide comment)
    nshahhsh, we raised this issue a few days ago I think and there was an article which showed that the us does have the most amount of gold, and then listed the other 9 (8 countries and the IMF at no.3 spot) Let me know if you want the link. :)
  • kurkku1962
    And what practical difference does it make whether the billing takes place in euros instead of US dollars? Please! Tell us.
  • most of the world's gold is in Jerusalem.. Believe in what you have to..! and welcome bitcoin.. whether like it or not..!
  • kurkku1962
    Perhaps transactions should take place in Iranian rials instead. Iranian banking notes hold pretty may zeros. In this respect it resembles Russian ruble and Zimbabwean dollar. Area of the notes must increase in order to make sufficiently space for printing the face values on them. One dollar buys thirty thousand one hundred eighty four rials and twelve dinars (30184.12) right now. Inflation runs at annual pace of 15% just like in Russia. How would Iranians (and Russians) find a political wisdom to maintain value of goods and services. Inflation is so rampant that today morning a loaf costs 1,000,000 rials while it will cost 3,000,000 rials this afternoon. Well, perhaps not quite so. Anyway, in whatever currency transformation the transaction to Iranian accounts will take place, the value starts to melt down immediately. I can see the good old days in Iran are behind us. Retail price for gasoline in Iran seems to be around fourty one US cents a litre. Zero point fourty one times thirty thousand one hundred eighty four rials and twelve dinars resulting about twelve thousand three hundred seventy five rials and forty nine dinars (0.41*30184.12=12375.49). A few years ago eight US cents bought a litre at an Iranian pump. Price has increased by about five hundred per cent (500%) since then. Why is it so? Well, Iran has not sold crude internationally in recent years. When they did, much of the returns were used to insanely subsidize retail prices in the country. When the profits from the crude export drained down, the subsidy scheme had to cease to exist. There was simply no money to keep it up anymore. It was all crazy a pattern anyway. Well, Iranian bozos calling out from their minarets are dead from their necks up anyway. They have their peers in the Kremlin......
  • kurkku1962
    Sizes of the US and EU economies are some 18 trillion each while the Russian economy is at 1.2 trillion and diminshing rapidly. The Iranian figure is around 0.4 trillion which is only slightly smaller than those of Norway and Austria. The Great Satan beyond the big pond is doomed! The figures link to the US dollar. Those of you who are willing to express national outputs by another currency, please do so.
  • False Flag in 3...2...1...
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