China Uses Yuan, Gold To Pay For Some Iran Crude

On May 8, 2012 by stratagem

Source: NASDAQ

China is using its currency, the yuan, and gold to pay for some of its imports of Iranian crude oil, according to Iran trade professionals.

The news underscores how the Islamic Republic is able to alleviate the effect of mounting sanctions, which in turn could ease global oil supply concerns and push oil prices further down.

One Iran trade professional said last week that Chinese oil companies have for many months been using the yuan to pay for some Iranian oil, after many banks refused to handle payments in dollars.

“In return, Iran is using the currency to pay for infrastructure such as roads,” the person told Dow Jones Newswires.

According to a person in the shipping industry, China now represents one-third of Iran’s oil sales.

European refiners have cut purchases of the Islamic Republic’s crude ahead of a planned embargo coming into force this summer; Asian buyers have also reduced imports to avoid being banned from the U.S. financial system.

 

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