Iran accepts yuan in exchange for oil
London, May 8, 2012
Iran is accepting yuan for some of the crude oil it supplies to China, partly due to US sanctions aimed at limiting Tehran's nuclear programme, and is spending the currency on Chinese goods and services, the Financial Times reported on Monday.
The newspaper cited unidentified industry executives in Beijing as saying most of the oil that goes from Iran to China is handled by the Unipec trading arm of Sinopec, China's second-largest oil company, and through another trading company called Zhuhai Zhenrong.
The trade between the two countries is worth as much as $20 billion to $30 billion annually, but a share of it is in barter form, such as the provision of drilling services, the FT said on its website.
"Such measures [as the US sanctions against Iran] will now enhance the acceptability of the renminbi as a transaction currency," it quoted the chief executive of one bank in Dubai as saying.
Purchases of the yuan, began some months ago, but as a result of US pressure, domestic banks such as Bank of China have stopped dealing with Iran, the paper quoted a source as saying. Much of the money is transferred to Tehran through Russian banks, which take large commissions on the transactions, it said. - Reuters