• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 15 mins Satellite Moons to Replace Streetlamps?!
  • 18 hours US top CEO's are spending their own money on the midterm elections
  • 17 mins EU to Splash Billions on Battery Factories
  • 3 hours U.S. Shale Oil Debt: Deep the Denial
  • 4 hours The Balkans Are Coming Apart at the Seams Again
  • 20 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 4 hours The Dirt on Clean Electric Cars
  • 15 hours Uber IPO Proposals Value Company at $120 Billion
  • 6 hours 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 18 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day Petrol versus EV
  • 21 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 22 hours 10 Incredible Facts about U.S. LNG
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Trending Discussions

EU Could Switch To Euros In Oil Trade With Iran

Oil tanker

The European Union (EU) is considering switching to euros instead of U.S. dollars in the oil trade with Iran, Sputnik reported on Wednesday, quoting a diplomatic source.

Europe—collectively one of Iran’s biggest oil customers after China and India—is trying to salvage the Iran nuclear deal after President Donald Trump withdrew the U.S. from the pact and paved the way to renewed sanctions on Iran, including on its energy sector and crude oil sales.

Iran, for its part, said as early as in mid-April that it would be switching to euros from U.S. dollars in reporting foreign currency amounts, to reduce the reliance on the dollar as it was expected that President Trump would not waive the sanctions this time around.

The EU vowed on Tuesday to seek ways to work and trade with Iran.

“We, together, regretted the withdrawal of the United States from the Iran nuclear deal and we recognised that the lifting of nuclear-related sanctions and the normalisation of trade and economic relations with Iran constitute essential parts of the agreement,” the European Union’s High Representative for Foreign Affairs and Security Policy, Federica Mogherini, said on Tuesday after meeting with the foreign ministers of the UK, France, and Germany, and separately with Iran’s foreign minister. Related: Will $100 Oil Kill The U.S. Economy?

The EU has launched expert discussions with Iran aiming to arrive at practical solutions in the next few weeks, Mogherini said. The issues that the talks will address include “maintaining and deepening economic relations with Iran; the continued sale of Iran’s oil and gas condensate petroleum products and petrochemicals and related transfers; effective banking transactions with Iran; continued sea, land, air and rail transportation relations with Iran; the further provision of export credit and development of special purpose vehicles in financial banking, insurance and trade areas, with the aim of facilitating economic and financial cooperation, including by offering practical support for trade and investment.”

The EU’s pledge to continue trading with Iran comes as Europe continues to buy Iranian oil, but some refiners and traders are flagging financing issues as having the potential to stop crude trade with Iran. Another big hurdle to Iran’s crude oil exports could be issues with the insurance of tankers carrying oil out of Iran, experts have warned, while some shipping companies are already refusing to commit tankers to new Iranian cargoes, for fear of complications in the cargo and insurance related payments.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment
  • Mamdouh G Salameh on May 16 2018 said:
    Iran has the right to defend is national interests against unjustified US sanctions. This time it is far better equipped to defend its interests thanks to cooperation from the European Union (EU) and the Petro-yuan.

    US sanctions prior to the Iran nuclear deal cost Iran a loss of 1 million barrels a day (mbd) in crude oil exports because of a combination of the EU’s sanctions on global insurance companies insuring Iranian oil cargoes and US sanctions on banking making it difficult for Iran to receive payments for its oil imports in petrodollar. The EU is not going to walk away from the Iran nuclear deal and therefore it will not be imposing any sanctions on Iran thus further weakening US sanctions.

    This time Iran will not lose a single barrel of oil exports. Not only the EU will not comply with US sanctions, they have vowed yesterday to maintain and deepen economic relations and trade with Iran, and also will consider switching to euros instead of US dollars in the oil trade with Iran.

    As for US sanctions on Banking, they will fail miserably as Iran will be using the petro-yuan for payment for its oil exports to China, the euro for its exports to the EU and barter trade with Russia, India and many other countries around the world thus bypassing the petrodollar altogether and nullifying the impact of the sanctions.

    Even if the United States puts pressure on the International Group P&I not to provide insurance of Iranian oil export cargoes and also insurance of tankers entering and leaving Iranian ports, not all members will comply with US sanctions against Iran. Chinese tankers could be provided to carry cargoes of Iranian oil exports sold to China. Moreover, nothing could stop Asian customers of Iranian oil from creating sovereign insurance entities with Iran also providing more coverage.

    The forthcoming US sanctions on Iran are starting to look as if they are going to fail
    Miserably.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Phil on May 16 2018 said:
    It should have been done (in an ideal world, of course) many years ago indeed!
    For Europe it is a question not only of pure economics but of political security. There is even more reason to do it, seeing that there won't be lack of suppliers who would not only agree but actually prefer to start using euro in the oil contracts.
    In a broader context, Europe would do even better to start the policy of promoting euro in the international trade (with creation of all the proper international agreements and, if need be, separate international institutions). The US fines of billions of dollars, like that one that was slapped by the US on the French bank BNP Paribas, and disruptive measure against large European institutions based on the US monopolistic privilege to control all the dollar transactions and outright abuse of that privilege put at risk much more than just purely economic interests of Europe.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News