Iran completely stops conducting oil transactions in US dollars

Oil Ministry official: "We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies."

dollars 298.88 (photo credit: Courtesy)
dollars 298.88
(photo credit: Courtesy)
Iran, OPEC's second-largest producer, has stopped conducting oil transactions in US dollars, a top Oil Ministry official said Wednesday, a concerted attempt to reduce reliance on Washington at a time of tension over Teheran'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 US pressure on its financial system and the fall in the value of the American currency. "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 US allies. 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 US dollars, motivated by the falling value of the greenback and US attempts to make it difficult for Iran to conduct dollar transactions. US 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 US has been wary of targeting Iran's oil industry directly, apparently worried that such a move could drive up crude prices that are already near record levels. Iranian analysts say Teheran can withstand US pressure as long as it can continue its oil and gas sales, which constitute most of the country's $80 billion in exports.