China shifts to euros for Iran oil
Saddam did it and now Iran is doing the same. Here's just another reason Dubya will have to take out Iran, to remove the Iranian Oil Bourse. Now Red China is buying Iranian oil with Euros instead of US Dollars.
It's not just about Oil, it's about Iran threatening the US Dollar to!
China shifts to euros for Iran oil
By Chen Aizhu 27-Mar-07 06:47 BST
BEIJING (Reuters) - China's state-run Zhuhai Zhenrong Corp, the biggest buyer of Iranian crude worldwide, began paying for its oil in euros late last year as Tehran moves to diversify its foreign reserves away from U.S. dollars.
The Chinese firm, which buys more than a tenth of exports from the world's fourth-largest crude producer, has changed the payment currency for the bulk of its roughly 240,000 barrels per day (bpd) contract, Beijing-based sources said.
Japanese refiners who buy about 500,000 bpd of Iranian crude, nearly a quarter of Iran's 2.2 million-bpd shipments, continue to pay in dollars but are willing to shift to yen if asked, industry sources and officials said separately.
Iranian officials have said for months that more than half the OPEC member's customers switched their payment currency away from the dollar as Tehran seeks to diversify its reserves, but news of the Zhenrong change is the first outside confirmation.
The price of the oil is still based on dollar quotes.
The shift, being watched closely by foreign exchange traders, comes amid an extended row between Tehran and Washington over Iran's nuclear programme.
China, which depends on Iran for about 12 percent of its imported crude oil, has at times used the threat of its United Nations veto to blunt Western measures.
The UN imposed new sanctions on Iran on Saturday as Tehran refused to halt its nuclear programme, targeting arms exports and 28 Iranian individuals and entities.
Iran's central banker told Reuters earlier on Tuesday that Tehran had cut its holding of U.S.-dollar assets to a minimum level of around a fifth of its foreign reserves in response to U.S. hostility, still enough to handle major shocks.
CHINA SWITCHES EARLY
"Most of China's purchases have shifted to euro. It's not difficult so long as our banks can handle that," said a Chinese state oil trader.
Hojjatollah Ghanimifard, head of international affairs at the National Iranian Oil Company (NIOC), told Reuters last week that around 60 percent of its oil income was in non-dollar currencies as almost all of Iran's European clients and some of its Asian customers had agreed to make non-dollar payments.
Iran is China's third-largest crude supplier with daily volume of 335,000 barrels last year. Sinopec Corp. <0386.HK>, Asia's top refiner but a minor lifter of Iranian oil, is still paying in U.S. dollars, said a Sinopec trader.
Japanese buyers, including top refiner Nippon Oil Corp. <5001.T>, said they had all received inquiries from Iran to pay on non-U.S. dollar terms, but were awaiting an official request.
"We are looking at it so that we can switch the currencies any time, but we have not gotten any official requests from them (NIOC). We are doing the transactions in dollars (now)," Nippon Oil chairman Fukuaki Watari told reporters last week.
Sources with other majors refiners concurred.
Iran ranks as Japan's third-largest crude supplier so far this year with daily rate of just under 500,000 bpd.
Tokyo has cautioned world powers against including oil in sanctions they may impose on Iran for its refusal to suspend atomic work, which the U.S. says is aimed at developing a nuclear weapon, but Tehran insists is for generating electricity.
Iran's major European customers include Royal Dutch Shell , France's Total and Spain's Repsol . The United States has banned imports of Iranian crude since 1995.
