Iran switching from dollars to euros


Richard Moore

Original source URL:

Iran May Reduce Use of Dollar, Tehran Papers Say (Update1)
By Marc Wolfensberger

Dec. 6 (Bloomberg) -- Iran, the world's fourth-largest oil exporter, plans to 
reduce its use of the U.S. dollar in world trade and increase use of the euro, 
two Tehran-based newspapers reported.

The Tehran Times said today Iran has started substituting euros for dollars in 
oil sales, citing an unidentified person at the Oil Ministry. Iran Daily 
reported Iran wants to cut its dollar-based transactions to a minimum, citing 
Minister of Economy Davoud Danesh-Ja'fari.

Iran's policy of selling oil in U.S. dollars ``has not changed yet,'' said 
Hojatollah Ghanimifard, executive director for international affairs at National
Iranian Oil Co., in a statement read to Bloomberg News from his office.

The U.S. and several European nations are pushing the United Nations to sanction
Iran for its nuclear program. The dollar touched a 20-month low against the euro
this week, and central banks in the Middle East including the United Arab 
Emirates have plans to convert some of their dollar reserves into euros.

Exporting nations ``are only holding so many dollars because of all the trade in
the currency, but if the trend begins to move out of it, then it's going to be a
positive for the euro and add to the negative sentiment on the dollar,'' said 
David Mann, a foreign-exchange strategist at Standard Chartered Bank Plc in Hong

The dollar was at $1.3278 against the euro at 8:07 a.m. in New York, compared 
with $1.3317 late yesterday.

Iran's oil export contracts for months have included a clause that allows the 
nation to seek payment in the euro and other currencies, creating a mechanism 
for a switch should Iran's policy change, according to traders who buy Iranian 

Lender Blocked

Organization of Petroleum Exporting Countries members including Qatar earlier 
this week expressed concern about the falling dollar, saying output should be 
cut to drive prices higher.

Iran has repeatedly said it would limit dollar-based transactions following the 
U.S. decision in September to block one of Iran's biggest state-owned lenders 
from doing business with the U.S. The U.S. Treasury on Sept. 8 blocked Bank 
Saderat for its alleged support of ``terrorist organizations'' such as Lebanon's
Hezbollah movement and Hamas in the Palestinian territories.

Iran exports 60 percent of its crude to Asia, 32 percent to Europe and 8 percent
to Africa. It is the world's fourth-largest exporter of crude and OPEC's 
second-biggest member. The nation last month produced 3.76 million barrels a 
day, according to data compiled by Bloomberg.

To contact the reporter on this story: Marc Wolfensberger in Tehran at 

Last Updated: December 6, 2006 11:03 EST

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