Iran Ends Oil Transactions In U.S. Dollars

 

OPEC‘s Second-Largest Producer Now Pegs Petroleum To Euros And Yen

<http://www.cbsnews. com/stories/ 2008/04/30/ business/ main4057490. shtml?source
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TEHRAN, Iran, April 30, 2008

(AP) Iran, OPEC‘s second-largest producer, has completely stopped conducting
oil transactions in U.S. dollars, a top Oil Ministry official said
Wednesday, a concerted attempt to reduce reliance on Washington at a time of
tension over Tehran’s nuclear program and suspected involvement in Iraq.

Iran has dramatically reduced dependence on the dollar over the past year in
the face of increasing U.S. pressure on its financial system and the fall in
the value of the American currency.

Oil is priced in U.S. dollars on the world market, and the currency’s
depreciation has concerned producers because it has contributed to rising
crude prices and eroded the value of their dollar reserves.

“The dollar has totally been removed from Iran’s oil transactions, ” Oil
Ministry official Hojjatollah Ghanimifard told state-run television
Wednesday. “We have agreed with all of our crude oil customers to do our
transactions in non-dollar currencies.”

Iranian President Mahmoud Ahmadinejad called the depreciating dollar a
“worthless piece of paper” at a rare summit last year in Saudi Arabia
attended by state leaders from the Organization of Petroleum Exporting
Countries.

Iran put pressure on other OPEC countries at the meeting to price oil in a
basket of currencies, but it has not been able to generate support from
fellow members – many of whom, including Saudi Arabia, are staunch U.S.
allies.

Iran has a tense relationship with the U.S., which has accused Tehran of
using its nuclear program as a cover for weapons development and providing
support to Shiite militants in Iraq that are killing American troops. Iran
has denied the allegations.

Iranian oil officials have said previously that they were shifting oil sales
out of the dollar into other currencies, but Ghanimifard indicated Wednesday
that all of Iran’s oil transactions were now conducted in either euros or
yen.

“In Europe, Iran’s oil is sold in euros, but both euros and yen are paid for
Iranian crude in Asia,” said Ghanimifard.

Iran’s central bank has also been reducing its foreign reserves denominated
in U.S. dollars, motivated by the falling value of the greenback and U.S.
attempts to make it difficult for Iran to conduct dollar transactions.

U.S. banks are prohibited from conducting business directly with Iran, and
many European banks have curbed their dealings with the country over the
past year under pressure from Washington.

However, the U.S. has been wary of targeting Iran’s oil industry directly,
apparently worried that such a move could drive up crude prices that are
already at record levels.

Iranian analysts say Tehran can withstand U.S. pressure as long as it can
continue its oil and gas sales, which constitute most of the country’s US$80
billion in exports.

 

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