MUMBAI (Commodity Online):India is the first buyer of Iranian oil to agree to pay for its purchases inGoldinstead of the US dollar,reported DEBKAfile's intelligence and Iranian. Those sources expect China to follow suit.India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehrantobypass the upcoming freeze on its central bank's assets and the oil embargowhich the European Union's foreign ministers agreed to impose Monday, Jan. 23. TheEU currently buys around 20 percent of Iran's oil exports.
The vast sums involved in these transactions are expected, furthermore, toboost the price of gold and depressthe value of the dollar on world markets.
Iran's second largest customer after China, India purchases around $12 billion a year's worth of Iranian crude, or about 12 percentof its consumption. Delhi is to execute its transactions, according to DEBKAfile, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up ofIndian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey's seventh largest bank which is owned by the government.
An Indian delegation visited Tehran last week to discuss payment options in view of the new sanctions. The two sides were reported to have agreed that payment for the oil purchased would be partly in yen and partly in rupees. The switch toGoldwas kept dark.
India thus joins China in opting out of the US-led European sanctions against Iran's international oil and financial business. Turkey announced publicly last week that it would not adhere to any sanctions against Iran's nuclear program unless they were imposed by the United Nations Security Council.
TheEU decision of Monday banned the signing of new oil contracts with Iranat once, while phasing out existing transactions by July 1, 2012, when the European embargo, like the measure enforced by the United States, becomes total. The European foreign ministers also approved a freeze on the assets of the Central Bank of Iran which handles all the country's oil transactions.
However, the damage those sanctions cause the Iranian economy will be substantially cushioned by theoil deals to be channeled through Turkish and Indian state banks. China for its part has declared its opposition to sanctions against Iran.
China and UAE ditch US Dollar, will use Yuan for oil trade
NEW YORK (Commodity Online): The US dollar is fast losing out its reserve currency status with China aggressively replacing the dollar with the Yuan as a currency for bi-lateral trade. The latest is an agreement signed between the China and the United Arab Emirates (UAE), which will use the Yuan for oil trade.
The deal is worth around $5.5 billion dollars and the Chinese central bank said that the deal aims at “strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability” Earlier, Russia and Iran had decided to use Rubles as a means of currency. With both China and Russia converting their bi-lateral trades into non-US dollar deals, the greenback is now under threat of losing out its status as the world reserve currency. And the impact of such a transition will essentially tip the balance of global power
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