Iran Ends Oil Transactions In U.S. Dollars OPEC's Second-Largest Producer Now Pegs
Petroleum To Euros And Yen
(AP) Iran, OPEC's
second-largest producer, has completely stopped conducting oil transactions in
U.S. dollars, a top Oil Ministry official said Wednesday, a concerted attempt
to reduce reliance on Washington at a time of tension over Tehran'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 U.S. pressure
on its financial system and the fall in the value of the American currency.
Oil is priced in U.S.
dollars on the world market, and the currency's depreciation has concerned
producers because it has contributed to rising crude prices and eroded the
value of their dollar reserves.
"The dollar has totally
been removed from Iran's
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
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 U.S. allies.
Iran has a tense relationship
with the U.S., which has
accused Tehran of using its nuclear program as a
cover for weapons development and providing support to Shiite militants in Iraq that are
killing American troops. Iran
has denied the allegations.
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,"
Iran's central bank has also
been reducing its foreign reserves denominated in U.S. dollars, motivated by
the falling value of the greenback and U.S.
attempts to make it difficult for Iran to conduct dollar
U.S. 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 U.S. has been wary of targeting Iran's oil
industry directly, apparently worried that such a move could drive up crude
prices that are already at record levels.
Iranian analysts say Tehran can withstand
pressure as long as it can continue its oil and gas sales, which constitute
most of the country's US$80 billion in exports.