Iran may switch to euro-based oil trade

Mumbai: Iran, the world's fourth largest oil exporter, will increasingly substitute the US dollar with the Euro for all oil sales, thereby reducing its use of the US currency in world trade, Iranian newspapers reported.

Iran has started substituting euros for dollars in oil sales, the Tehran Times said quoting unidentified sources in the oil ministry. Another newspaper, Iran Daily, citing economy minister Davoud Danesh-Ja'fari said Iran wants to cut its dollar-based transactions to a minimum.

Although Iranian oil officials denied any change in Iran's policy of selling oil in US dollars, its 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 oil.

With the US dollar touching a 20-month low against the euro this week, several central banks in the Middle East, including the United Arab Emirates, have also plans to convert some of their dollar reserves into euros.

Members of the Organisation of Petroleum Exporting Countries (OPEC), including Qatar, had expressed concern about the falling dollar, saying output should be cut to drive prices higher.
Iran has also repeatedly said it would limit dollar-based transactions following the US decision in September to block Bank Saderat, one of Iran's biggest state-owned lenders, from doing business with the US.

Iran exports 60 per cent of its crude to Asia, 32 per cent to Europe and 8 per cent to Africa.