Iran doesn’t want to sell oil priced in US dollars or euros

24 July 2010 24 July 2010

BonTrade

An Iranian government official voiced his intentions to reject both US dollar and euro as payment for the oil giant’s energy exports in the future. Iran has the world’s second largest gas reserves and third largest oil reserves.

According to the Iranian television channel “Press TV”, vice-president Mohammad Reza Rahimi said: “It is important to exclude the euro and the dollar” but it was not yet decided which currency could serve as a replacement.

Reza Rahimi’s comment comes one week after Bloomberg reported that Iran was already in talks with European oil importers to decide about a new currency, with no decision yet forthcoming.

The move is in line with Iranian efforts to become more independent from the euro, as well as from the US dollar. Two months ago it was revealed that Iran´s central bank was shifting some of its large euro holdings in part back into US dollars, but also into gold and presumably a basket of other currencies.

On the other hand, Iran intends to sell a large amount of debt denominated in euro. Until March 2011, Iran plans to issue bonds valued at 11.5 billion euros in order to finance power plants and oil and gas projects, Mr. Rahimi told Mehr, the Iranian news agency.

The USA recently introduced new sanctions aiming to prevent investments in Iran´s oil and gas industry, while also stopping gasoline exports to Iran. Although the European Union is following suit, many other countries like Turkey and China are continuing economic cooperation with the Iranians.