Now we know what happened to Saddam and Gaddafi when they went down this route, but Iran are a different prospect. In recent months Iran has announced that it is to trade its oil with Russia, China and India in their own currencies but the Iranian state news agency IRNA has stated that it will accept payment in gold instead of dollars as a result of being unable to make the transactions in dollars due to sanctions. As Reuters put it

Significant difficulties in making dollar payments to Iranian banks have forced Iran’s trading partners to look for alternative ways to settle transactions, including direct barter deals.“In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency,” central bank governor Mahmoud Bahmani was quoted as saying. “If a country should so choose, it can pay in gold and we would accept that without any reservation.”

The sanctions include a phased ban on importing oil from Iran, which EU member states are to implement by July.

China and India, two of the largest consumers of Iranian oil, have said they will continue imports, but Japan and Korea have announced cuts to quotas following pressure from the United States. As a result the value of Iran’s rial has plummeted, pushing the price of goods sharply higher across the country.

Iran also has another way around the sanctions

Iran imports commodities from China and India in exchange for the countries’ currencies. Tehran’s move is aimed at bypassing the upcoming freeze on CBI’s assets and the oil embargo, which the European Union’s foreign ministers agreed to impose on the Islamic Republic.

 

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