India To Pay Gold For Iran Oil, China May Follow—–EU Sanctions

India has reportedly agreed to pay Tehran in gold for the oil it
buys, in a move aimed at protecting Delhi from US-sanctions targeting
countries who trade with Iran. China, another buyer of Iranian oil, may
follow Delhi’s lead.

The report, by the Israeli-based news website DEBKAfile, states that
Iran and India are negotiating backup alternatives with China and
Russia, should the US and EU find a way to block the gold payment
Delhi’s move is seen as surprising, as earlier India
and Iran said they would switch to yen and rupees. China, another major
importer of Iranian oil, may follow Delhi’s lead, the report adds.
and China need to switch from the dollar in bilateral trade, since the
US and EU have issued unilateral sanctions against the Iranian oil
industry and financial institutions. The sanctions would ban any bank
involved in oil trade with Iran from dealing with American and European
Both India and China, two major buyers of Iranian
oil accounting for 22 and 13 percent of its total export respectively,
have refused to join such sanctions. This means they have to establish a
reliable way of paying for crude, independently of the parts of the
global financial system controlled by New York and London.
current plan is to effect payments through two state-owned banks,
India’s UCO Bank and Turkey’s Halk Bankasi, Turkey being another country
refusing to join the sanction spree.
The US issued sanctions
against Iran in December, aiming to put pressure on the Islamic Republic
and make its controversial nuclear program more transparent. The EU
joined the initiative on Monday, banning new oil contracts with Iran,
but allowing current ones to be fulfilled.
Australia on Tuesday
became the latest country to voice plans for such an embargo, although
the move would be more symbolic than practical, considering the
country’s small share in Iran’s oil export.

Japan and South
Korea, two other major buyers of Iranian crude, are in talks with
Washington over the issue, although both Seoul and Tokyo are worried
that stopping their imports could hurt their economies.
which is highly dependent on its sales of oil, is reacting to the
sanction campaign nervously. Tehran says it will not yield to pressure,
and threatens to block the Strait of Hormuz, a key oil tanker route in
the Persian Gulf.