Skip to comments.India, Iran resolve oil row (Agree to stop using Dollars)
Posted on 01/03/2011 2:15:34 PM PST by FromLori
NEW DELHI: As officials from Iran and India on Friday were holding talks on finding ways to keep the $11 billion bilateral oil and gas trade intact, a top Iranian official was quoted as saying that the two countries have resolved the oil-payments dispute.
"The surplus trade between India and Iran, of which oil is an important part, was in euros and dollars. In order to prevent Americans and Europeans creating trouble for (oil sales), we switched to other currencies like the Japanese yen, the Emirati dirham, or other monetary units," Iran's Fars news agency quoted Ahmad Khaledi, Iran's deputy oil minister, as saying.
On Dec. 23, the Reserve Bank of India said that companies would be allowed to settle current account and trade transactions with Iran outside the Asian Clearing Union (ACU).
The ACU, based in Tehran, is an arrangement where the participants settle payments for intra-regional transactions among member central banks, helping economize the use of foreign exchange and transfer costs. The bloc includes the central banks of India, Bangladesh, the Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.
Participants in the ACU settle transactions in either the US dollar or euro. Iran had refused to sell oil under the new rules.
Earlier in the day, the Indian government dismissed reports that it was acting under pressure, adding that there was a "technical" problem in settling the current account transactions with Iran under the ACU.
"Efforts are being made to resolve the issue as soon as possible," India's External Affairs Ministry said. "We have seen reports regarding problems with respect to settlement of current account transactions with Iran under the Asian Clearing Union mechanism."
"This is a technical issue and the Reserve Bank of India is seized of the matter. Efforts are being made to resolve the issue as soon as possible. There is no question of India acting under pressure of any country," the ministry said, without naming the United States, which wants governments to stop dealing with Iran because of its nuclear program.
The White House on Thursday praised the RBI's decision, a move that came less than two months after the US President Barack Obama's trip to India, where he pledged to help boost New Delhi's global role.
India and Iran could agree to settle deals in Iran's rial or another currency such as the Japanese yen, Indian Oil Secretary S. Sundareshan suggested Thursday. Payments through a third-country central or commercial bank was also on the card.
India is the world's fourth-largest importer of crude and Iran is its second largest supplier after Saudi Arabia. India buys about 400,000 barrels per day of Iranian crude, sending roughly $12 billion a year to Tehran via the Asian Clearing Union, a system created in the 1970s.
Currently, Iran has four big oil buyers China, Japan, South Korea and India. Of these, China and Japan follow the European bank channel route. South Korea deals a currency-to-currency route, which is not financially viable for India because of its trade imbalance with Iran.
UN sanction on Iran do not forbid buying oil from the country. Recently, the European Central Bank asked the RBI and other central banks of ACU to provide certificates that the euro being used to import products are not on US sanctions list.
I thought the job stealing Indians who generally write s***ty software code were our friends?
Probably actually paid off in cash for India. If they have to pay in Yen, which is falling much faster than the dollar, then any delay will reduce India’s cost of fuel as well as how much Iran gets paid.
Do we in the U.S. care that they aren’t using dollars? I can’t think of why we would.
His “own” country is Kenya.
Forget 100 Federal Reserve Notes pbl. Here comes 200.
Oman doubles spending as oil revenues surge
Good luck with that.
Look at Wahabbi-exporting Saudi Arabia, pampered to the core by the US in spite of its Wahabbi-government domestic and foreign policies allowing 9-11 to occur, among other things. In fact, they've only redoubled their efforts when it comes to exporting Wahabbi mosques / indoctrination centres, right here in the US.
And then there is Pakistan, receiving advanced anti-tank and anti-ship weaponry, along with the latest-block F-16s, gratis from the US, to attack the mythical Taliban Flying Carpet Force and Tank battalions.
When you have a China/India competition that seeks to buy critical natural resources like petroleum from wherever possible, the problem is further compounded from India's perspective.
You aren't thinking like bankers at the federal reserve. If you were, you would care.
(hint: it get's our hooks into the rest of the world's business)
gets, not get’s