Sanctions dodge: India to pay gold for Iran oil, China may follow

[Sugarcane]

India has reportedly agreed to pay Tehran in gold for the oil it buys, in a move aimed at protecting Delhi from US-sanctions targeting countries who trade with Iran. China, another buyer of Iranian oil, may follow Delhi’s lead.

The report, by the Israeli-based news website DEBKAfile, states that Iran and India are negotiating backup alternatives with China and Russia, should the US and EU find a way to block the gold payment mechanism.

Delhi’s move is seen as surprising, as earlier India and Iran said they would switch to yen and rupees. China, another major importer of Iranian oil, may follow Delhi’s lead, the report adds.

India and China need to switch from the dollar in bilateral trade, since the US and EU have issued unilateral sanctions against the Iranian oil industry and financial institutions. The sanctions would ban any bank involved in oil trade with Iran from dealing with American and European counterparts.

Both India and China, two major buyers of Iranian oil accounting for 22 and 13 percent of its total export respectively, have refused to join such sanctions. This means they have to establish a reliable way of paying for crude, independently of the parts of the global financial system controlled by New York and London.

Delhi’s current plan is to effect payments through two state-owned banks, India’s UCO Bank and Turkey’s Halk Bankasi, Turkey being another country refusing to join the sanction spree.

The US issued sanctions against Iran in December, aiming to put pressure on the Islamic Republic and make its controversial nuclear program more transparent. The EU joined the initiative on Monday, banning new oil contracts with Iran, but allowing current ones to be fulfilled.

Australia on Tuesday became the latest country to voice plans for such an embargo, although the move would be more symbolic than practical, considering the country’s small share in Iran’s oil export.

Japan and South Korea, two other major buyers of Iranian crude, are in talks with Washington over the issue, although both Seoul and Tokyo are worried that stopping their imports could hurt their economies.

Iran, which is highly dependent on its sales of oil, is reacting to the sanction campaign nervously. Tehran says it will not yield to pressure, and threatens to block the Strait of Hormuz, a key oil tanker route in the Persian Gulf.

*German political analyst Christoph R. Horstel told RT that amid the economic crisis the embargo on Iranian oil imports could backfire on the EU, while Iran “will do quite well even under the embargo.”

“All the present faithful customers to Iran oil are set to continue buying this oil, and they will find a way, rest assured,” he said. “This is the signal I get from Tehran.”

“I was personally present when the deputy economics minister of Iran was talking to a foreign society in Berlin,” he added. “And the gentleman said very openly to the shocked audience ‘OK. You don’t want to buy our goods. Well, the Chinese do.”

Neil Padukone from the Takshashila, an independent Indian think tank, told RT that countries like China, Russia and India are now looking for other creative ways to engage with Iran while insulating themselves from punitive actions from the United States. “And some of these actions include paying in gold rather than dollars and also building new, independent corporate entities that don’t even participate in Western markets.”

Sanctions dodge: India to pay gold for Iran oil, China may follow — RT

 

[JohnyD]

This is not the truth, in fact India is contemplating to settle trade in Indian rupees..


India mulls using rupee to pay for Iran oil imports

NEW DELHI — India said Monday it may use its own currency, the rupee, to pay for oil imports from Iran in the face of a US-led sanctions campaign aimed at forcing Tehran to abandon its nuclear programme.

India has said it will continue to import oil from Iran, joining China in refusing to bow to intensifying US pressure not to do business with Iran.

India currently routes its dollar payments for Iranian crude through a Turkish bank -- an avenue that might be closed off as Washington ratchets up pressure on the Persian Gulf state.

"There are different (payment) options which are being evaluated and discussed. We are also considering the rupee as an option," Reserve Bank of India Deputy Governor H.R. Khan told reporters.

Indian officials say the country could pay partly for its Iranian oil imports in rupees that Iran could then use to buy Indian goods.

However, they say Iranian imports of Indian goods would not cover New Delhi's entire oil purchase bill.

India pays Iran about $1 billion every month through Turkey for the 370,000 barrels a day of crude oil it buys from the world's fourth-largest oil producer.

Khan said as of now there had been no disruption in the current payment arrangement.

But the Press Trust of India quoted a senior government official as saying there were indications from Turkey's state-run Halkbank that it would have to stop settling payments on behalf of Indian companies.

The news agency did not name the official.

Iran is India's second-largest oil supplier after Saudi Arabia, providing around 12 percent of the fast-growing country's crude needs.

An Indian delegation visited Tehran earlier this month to discuss payment options.

India's Finance Minister Pranab Mukherjee told reporters in Chicago on the weekend that New Delhi would not scale down its petroleum imports from Iran despite US and European sanctions against the Islamic republic.

"We will not decrease imports from Iran," Mukherjee was quoted as saying by the Press Trust of India at the end of a two-day visit aimed at wooing US investment.

"Iran is an important country for India despite US and European sanctions on Iran.

"It is not possible for India to take any decision to reduce imports from Iran drastically."

The West fears Iran is trying to build a nuclear bomb. Tehran insists its nuclear programme is only for civilian use and refuses to abandon its uranium enrichment activities.

AFP: India mulls using rupee to pay for Iran oil imports

 

[Splurgenxs]

IF India chose to pay in Gold ....all the inflation in the value of gold needs to be factored in year on year or after every shipment.

anyone expecting gold (an important Fixed asset) will have to deduct any extra value raised on the price of gold ,in the bill of services provided.

All though im sure gold will be used as the very last resort,u cant expect a payment of gold on face value at real time rates.