Iran accepts renminbi for crude oil

Discussion in 'China' started by Avenger, May 16, 2012.

  1. Avenger

    Avenger Tihar Jail Banned

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    High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. Iran accepts renminbi for crude oil - FT.com


    Iran is accepting renminbi for some of the crude oil it supplies to China, industry executives in Beijing and Kuwait and Dubai-based bankers said, partly as a consequence of US sanctions aimed at limiting Tehran’s nuclear programme.

    Tehran is spending the currency, which is not freely convertible, on goods and services imported from China.

    Most of the oil that goes from Iran to China is handled by the Unipec trading arm of Sinopec, China’s second-largest oil company, and through another trading company called Zhuhai Zhenrong, the oil industry executives said.


    The trade is worth as much as $20bn-$30bn annually according to industry estimates, but a share of it is in barter form. Zhuhai Zhenrong, for example, pays Iran for its oil by providing services such as drilling, these people add.

    “The global financial crisis accelerated the shift from the west to the east,” said the chief executive of one bank in Dubai. “Such measures [as the US sanctions against Iran] will now enhance the acceptability of the renminbi as a transaction currency.”

    The US applied sanctions on Zhuhai Zhenrong earlier this year for allegedly brokering gasoline shipments to Iran – which lacks refining capacity – a charge that the company has denied.

    Washington has also imposed sanctions that force financial institutions to choose between doing business with Iran or with the US and it has spearheaded restrictions on Tehran’s central bank. The sanctions and a diplomatic push have led to a reduction in Iranian oil imports by Japan, South Korea, India and China, which together buy more than 60 per cent of Iran’s crude oil exports.

    India, which already settles its oil purchases from Iran in rupees, was again urged on Monday by Hillary Clinton, US secretary of state, to cut its imports further.

    The renminbi purchases began some months ago. Initially the non-barter portion of the transactions were settled in Beijing through renminbi accounts but now, as a result of US pressure, domestic banks such as Bank of China have stopped dealing with Iran, the oil executives and bankers said.

    Instead, much of the money is transferred to Tehran through Russian banks, which take large commissions on the transactions, these people said.

    Beijing has been trying to get its trading partners to use the renminbi, in effect transferring the exchange rate risk to its counterparties, since the price of crude is set in US dollars. It also frees Beijing of the need to hold as many dollars in its reserves.

    Iran sells 21 per cent of its crude oil exports to China, making Beijing crucial to Tehran’s ability to withstand unilateral US sanctions.

    In March, amid growing efforts to isolate Iran, Sinopec renegotiated its contracts and successfully pressed for larger discounts, though “both sides are under strict orders not to talk and nobody knows the exact terms”, one industry source said. There was a sharp drop in Chinese oil imports from Iran in January and February but analysts expect a recovery over the course of the year.

    Sinopec, Zhuhai Zhenrong and Iran’s central bank declined to comment on the renminbi for oil trading.

    Iran accepts renminbi for crude oil - FT.com
     
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  3. Avenger

    Avenger Tihar Jail Banned

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    China and Iran are brothers!
     
  4. badguy2000

    badguy2000 Respected Member Senior Member

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    another step to undermine the rule of US dollar.
     
  5. s002wjh

    s002wjh Senior Member Senior Member

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    yes, some brothers they are. NK, paks etc i guess when china can't get Sk to be its brother, it will have to do with its red head step brother NK
     
  6. Avenger

    Avenger Tihar Jail Banned

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    SK and japan presidents fly to China last week to talk about FTA.
     
  7. s002wjh

    s002wjh Senior Member Senior Member

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    yes so does US president, but US/china are not ally is it. its business partner. china/iran are just using each other to benefit them, thats about it. they share same goals/interest but i won't call china/iran are brothers.
     
  8. Avenger

    Avenger Tihar Jail Banned

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    China and US talked about FTA? are you sure?
     
  9. s002wjh

    s002wjh Senior Member Senior Member

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    No my point was SK/japan are not ally of china, but business partner same goes for US. the relation between japan/sk/china is different than china/nk/pak.
     
  10. Avenger

    Avenger Tihar Jail Banned

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    Do you see any FTA country is not ally or kind of ally?
     
  11. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    China & Iran are brothers?

    Then how come China halved its oil imports from Iran ?
     
  12. Avenger

    Avenger Tihar Jail Banned

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    You can trust the source you want to trust.
     
  13. s002wjh

    s002wjh Senior Member Senior Member

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    do you think japan/s.korea/china are allies :rolleyes:
     
  14. redragon

    redragon Regular Member

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    No, no for now, maybe in another 10 yrs or so
     
  15. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    I was asking if Iran is China's brother then how come Beijing halved its Iranian oil imports last month ?
     
  16. Avenger

    Avenger Tihar Jail Banned

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    Where did you see" halved oil import"?

    Iran or Chinese media? western media?:cool2:
     
  17. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    China halved its Iranian oil imports for month ending March. Put it in Google & choose the source of your liking.
     
  18. Avenger

    Avenger Tihar Jail Banned

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    Show me one source from China or Iran.:cool2:

     
  19. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Check customs-info.com, your own chinese Customs record keeper. You need registered account over there.
     
  20. Avenger

    Avenger Tihar Jail Banned

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    I thought you checked before you post.:cool2:
     
  21. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Try putting some sense in your posts.

    Ofcourse I did check it when the data was released. Its all out there with hundreds of free internet sources reporting it.

    However, it can be difficult enough for a Chinese to not to believe it hence the Chinese source is forwarded to you.

    The statistics report the same what has been observed that the china cut down its iranian oil imports almost by 50% by the latest month ending March.

    Hope you are allowed to browse that website unless chicoms have implemented total internet dictatorship!
     

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