Iran No Longer Accepting Dollars For Oil, Demanding Euros Instead

The new currency policy will be yet one more blow to the dollar as the world reserve currency.
By @BrandonTurb |
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    Even with a number of U.S. sanctions against Iran coming to an end, the Iranian government has recently made a very important decision in regards to its oil payment system and it could spell bad news for the United States. This is because Iran has apparently decided to no longer accept U.S. dollars for payment on both its new and outstanding oil sales. Instead it will receive its payment in euros.

    Reuters has cited an official from the National Iranian Oil Company (NIOC) as stating that the new plan will apply to “newly signed deals” with France’s Total, Russia’s Lukoil, and Spain’s Cepsa.

    Reuters quotes the official as saying that “In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery.”

    In addition, Iran is also informing its trading partners, including India, that owe billions of dollars that it now prefers to be paid in euros instead of dollars.

    “Iran shifted to the euro and cancelled trade in dollars because of political reasons,” the official source said, pointing out that this policy was concocted during the time of the sanctions.

    Hossein Yaqoubi-Miab, the director for international affairs department of the Central Bank of Iran (CBI), has stated that plans have already been made to receive the euro payments from India which total about $6.5 billion.

    Reuters also mentioned that India is currently working on a system that would involve the United Commercial Bank (UCO) and the IDBI Bank handling the payments to Iran.

    The new Iranian policy of receiving payments in euros as opposed to dollars is one that is likely to upset the United States who has maintained relative dominance as the world reserve currency for decades, a position that has gradually begun to erode as free trade and global empire have caught up with the dwindling superpower.

    Thus, the Iranian currency policy will be yet one more blow to the dollar as the world reserve currency and might possibly be a catalyst for further antagonism toward Iran on the part of the United States.

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    • Georga96

      This is why the idiot Trump wants to go to war with IRAN!!!

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    • Daniel

      Great news.

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    • Iran Fail

      This has very little to do with economics and more do with sending a message Iran is looking to punish the US by de-dollarizing the oil trade. This comes at a time when the petro dollar is under tremendous pressure. Russia and China are already settling oil sales in yuan and “lower for longer” crude has broken the virtuous circle whereby producing countries were net exporters of capital, recycling their USD proceeds into USD assets thus underwriting decades of dollar dominance.

      The question, we suppose, is whether other producers move away from the dollar just as Russia and Iran have. If there’s a wholesale shift away from settling oil sales in greenbacks, another instrument of US hegemony will be dismantled and Washington’s leverage over “unfriendly” producers will have been broken. The irony is this: if Iran follows through on its promises to flood an already oversupplied market, crude might not fetch any “worthless pieces of paper” at all – dollars or euros.

      • David Christian

        China still has an insatiable appetite for dollars and US treasuries. Russia and Iran may hate it, but it does not matter.

    • Erik Hare

      This is only good for everyone. The main reason the US is losing the currency war is because we have the world’s top reserve currency, used in 85% of all commodity transactions. Reducing demand for the USD will lower its value and make it possible for us to price our exports more competitively.
      Next question – how important is this move by Iran in the general move away from the USD as the main reserve currency? Probably not important at all. But it’s a good thing all the same, even if only as a token.

    • James Wherry

      Intersting, how much America is getting for agreeing to a deal with Iran.


    • Andrew Pritchard

      Interesting that the Iranians “concoct” their policies (5th paragraph). This verb has a subtly negative meaning (implying a mixture of amateurishness and – perhaps here – a dash of conspiracy).

    • Alfredo Louro

      Didn’t Saddam Hussein try the same thing?

      • yuri_nahl

        Also the beloved Colonel Gaddafi. This instant replay makes it easier to understand why North Korea wants to own hydrogen bombs. Some people only respect hydrogen bombs, and those who pass on the chance to own them risk being “democratized” by the western vultures. The Russians and Chinese may have Iran’s back. H.E. President Putin seems to be a man of his word, unlike president George H.W. Bush who promised to back the Iraqis if they rose up against Saddam. Bush then watched as Saddam’s helicopter gunships slaughtered the Iraqi freedom fighters. I assume that dwellers of the Middle East (who know the sights of the western hyenas are on their oil fields) consider the fate of the Iraqis, Libyans, Syrians when these momentous decisions are made. Luckily there is not a tradition of watching muscular men wearing spandex tights batting, kicking, or throwing a ball around as this “ball game” tradition has seemed to develop a memory span of five minutes in those nations which have succumbed to it. This leads to a condition in which most westerners cannot remember the years of the start and finish of the two World Wars, or even where the Korean War took place.

        • SvenTheBold

          Short historical memory is not because of football, American or otherwise. South America has its bite-happy and wife-murdering football stars, Europe has its riots… call sports and athletes and their fans distasteful if you like, the fact remains that *many* people around the globe play and excel at ball games, and yet no one who has seen the differences between these places believes that they all suffer mental penalties for it, let alone that they do so equally.

          If you want to know why a nation has a short historical memory, ask yourself if it is rich. Then ask why.

          Much of Europe became rich through being imperialistic; but many parts of it have *stayed* rich by managing their resources intelligently. Many parts of Europe have stayed rich because of their virtues (virtues, ironically, that America thinks belong to it), virtues like thrift, charity, prudence, mutuality, and above all a collaborative ethic. These places are much more likely to remember history.

          America became rich by taking a continent by force, and it has stayed that way (along with many parts of Europe) through continued imperialism, both by the sword and by the pen, both in public and in private. Imperialism cannot abide by history, because history tells a story more complicated than imperialist propaganda; and so an imperialist state removes its history.

          *This*, not football, is the reason why westerners have a short historical memory; idiocy comes from the deliberate actions of an organized system, not from a magical power of muscle spandex.

          • yuri_nahl

            Yes, there’s that too.

          • yuri_nahl

            I apologize for being too lazy to reply till now. In the mid-1800s, some French guy wrote, (something like) “Giving the chumps a church and a sports stadium is a cheap investment which makes them forget how you are sodomizing them at the factory, working them and their children for twelve hours per day, six days a week.” Unfortunately I can’t remember his name.

    • Progressive Republican

      Given the inherent instability of the Euro, they could well not only be pissing off the U.S. with this poke in the eye, but also be shooting themselves in the foot; especially if austerity maintains its standing in European economic policy making the next few years interesting to watch.

    • Dean Collins

      Traders quoted as saying “no big deal”.

      lol its all meh until someone gets a poke in the eye then its “fully funded political overthrow”….lol where have i heard this before about Iran and the USA oh yeh thats right….they’re still pissed at us the last time we overthrew their government and installed a political puppet.

      • David Christian

        Operation Ajax was a nasty trick, but the Anglo American Oil company did not want to be nationalized. Americans and British don’t like having their equipment stolen. Venezuela did that once, now look at them.