Iran may switch to euro for crude sale payments

Aug 20, 2002 02:00 AM

US scrutiny of global banking since September 11 has spooked Iran into mulling a switch from dollars to euros for crude oil sales, its primary revenue earner, oil industry sources said. Iran could deal a psychological blow against the struggling dollar if it forces customers to pay billions of euro every year for their oil imports.
"As a precaution, the Central Bank of Iran is looking into a switch away from dollar payments -- with the euro a favoured alternative," said an Iranian oil industry source. "The US is keen to know who is sending and receiving dollars and they may make it difficult to transfer our money, especially when they know it is for Iran," said an Iranian industry source.

Iran's Central Bank has yet to issue a final decision on whether to drop the US greenback, the international currency of oil, for its exports. A committee of experts is mulling the move.
A rough calculation shows Iran has earned at least $ 10 bn so far this year from crude exports, with oil revenues providing 80 % of its foreign income.

Revenue from Iran's daily crude sales of just under 2 mm barrels eventually returns to the Central Bank. But along the way, the money is transferred through a series of intermediary banks, mostly European. International bankers said all transactions involving large amounts of dollars are cleared through master accounts held in New York. And the New York Federal Reserve has access to information about such transfers, they said.
"After September 11, US authorities were chasing terrorist funds and they were questioning a lot of things," said a senior banker. "There were many wild goose chases."

Iranian sources said their banking colleagues have felt particularly hassled during the past several months, as Washington heats up its war of words on Tehran. This has encouraged Tehran to speed the pace of an ongoing debate to abandon the dollar as payment for oil sales.

Source: Gulf Daily News
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