Reuters: Iran, at odds with the West over its nuclear program, has effectively cut all ties with the dollar when it comes to oil revenues, a top Iranian oil official said on Monday. LONDON (Reuters) – Iran, at odds with the West over its nuclear program, has effectively cut all ties with the dollar when it comes to oil revenues, a top Iranian oil official said on Monday.
For nearly two years, OPEC’s second biggest producer has been reducing its exposure to the dollar, saying the weak U.S. currency is eroding its purchasing power. Tehran is now fetching roughly $87 a barrel on daily crude sales of 2.4 million.
“This is an economic decision and we’ve been proven right. Over time the dollar has got weaker and weaker,” Hojjatollah Ghanimifard, international affairs director of the state owned National Iranian Oil Company (NIOC) told Reuters.
“On a macro-economic level, nearly all of Iran’s crude oil sales are now being paid for in non U.S. currencies.”
Ghanimifard said less than 20 percent of Iran’s oil export earnings are in yen and the rest in euros.
He explained that NIOC is receiving more than 80 percent of its payment for crude in currencies other than the dollar.
The remainder is settled in euros through a long-standing clearing arrangement between Iran’s Central Bank and various Asian governments.
Iran presented its economic case against the dollar at an OPEC heads-of-state summit in Riyadh at the weekend.
The Islamic Republic and anti-U.S. ally Venezuela made clear before and after the summit they would press for action, which could include pricing oil in a basket of currencies.
“If there is a decision to do that, it would be a very easy procedure between the buyer’s and seller’s banks,” said Ghanimifard.
About 60 percent of Iran’s overall crude sales are destined for Asia, with the remainder moving mostly into Europe and Africa. The United States has banned imports of Iranian crude since 1995.
(Reporting by Peg Mackey)