January 24, 2012

India to pay gold for Iran oil, China may follow

Russian TV carried the news that India has decided to pay for Iranian oil in gold .This was also carried by an Indian website Rediff based on Israeli website Debkafile ;

This is really breaking news .The two rogue states US and Israel are holding the world to ransom .Washington has obstructed all Indian attempts to organise energy security .It even got minister Mani Shankar Aiyar dismissed .

US is bankrupt with its debt as much as its GDP .It is surviving because of over three trillion dollars stimulus created based on nothing . The last IMF chief had allegedly indicated that US does not even have the gold it claims to have!

China might follow the Indian line .It will encourage many other countries of Asia like Japan and S Korea who buy Iran oil. Enough of US highhandedness .Some Gulf states are ready to sell oil to China for Chinese currency.

India's is the first major step to weaken position of US dollar as the reserve currency .The dollar will thus weaken .Under US pressure EU which has issued sanctions against Iran , a collection of bankrupt nations ,they will suffer too .They are welcome to be even more reliant on Russia for its energy .

India to pay for Iran's oil in gold
January 24, 2012 18:27 IST
India has decided to pay Iran in gold for its oil purchases, writes Faisal Kidwai

India has decided to pay Iran in gold for the oil it purchases, according to a report carried by an Israeli news website DEBKAfile.

The move is an attempt to work around the sanctions imposed by the United States and Europe over Iran's alleged nuclear programme.

India had earlier indicated that it was in talks with Iran to pay for the oil in either rupees or in yen, but now it seems that India has decided to switch to gold.

An Indian delegation visited Tehran last week to discuss payment options in view of the new sanctions.

The two sides were reported to have agreed that payment for the oil purchased would be partly in yen and partly in rupees. Plan to make the payment in gold was apparently kept a secret.

India has been looking at ways to switch from dollar as the US and EU have imposed sanctions on Iran's oil industry and financial institutions.

The embargo means any bank dealing with Iran would be banned from transacting with American and European financial institutions.

India has refused to join the sanctions, saying it will only support United Nations-backed embargo. The move by India, if true, will have other unintended consequences: it will bring down the value of dollar.

If India does decide to pay Iran in gold, the decision will certainly push the price of gold high, especially as vast sums are involved in such transactions, and that would hurt the value of the dollar.

India buys around $12 billion a year's worth of Iranian crude, or about 12 per cent of its total requirements. It will manage the deal through UCO Bank [ Get Quote ], an Indian bank [ Get Quote ] which has no financial links with the US, and Halk Bankasi, a Turkey-based bank, according to reports.

Sanctions dodge: India to pay gold for Iran oil, China may follow
Published: 24 January, 2012, 12:53
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 mechanism.
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.
India 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 counterparts.
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.
Delhi’s 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.
Iran, 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.
German political analyst Christoph R. Horstel told RT that amid the economic crisis the embargo on Iranian oil imports could backfire on the EU, while Iran “will do quite well even under the embargo.”
“All the present faithful customers to Iran oil are set to continue buying this oil, and they will find a way, rest assured,” he said. “This is the signal I get from Tehran.”
“I was personally present when the deputy economics minister of Iran was talking to a foreign society in Berlin,” he added.“And the gentleman said very openly to the shocked audience ‘OK. You don’t want to buy our goods. Well, the Chinese do.”

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