Posted on 01/23/2012 11:18:49 AM PST by JohnKinAK
India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.
The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets. Iran's second largest customer after China, India purchases around $12 billion a year's worth of Iranian crude, or about 12 percent of its consumption. Delhi is to execute its transactions, according to our sources, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of Indian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey's seventh largest bank which is owned by the government. 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. The switch to gold was kept dark.
India thus joins China in opting out of the US-led European sanctions against Iran's international oil and financial business. Turkey announced publicly last week that it would not adhere to any sanctions against Iran's nuclear program unless they were imposed by the United Nations Security Council. The EU decision of Monday banned the signing of new oil contracts with Iran at once, while phasing out existing transactions by July 1, 2012, when the European embargo, like the measure enforced by the United States, becomes total. The European foreign ministers also approved a freeze on the assets of the Central Bank of Iran which handles all the country's oil transactions. However, the damage those sanctions cause the Iranian economy will be substantially cushioned by the oil deals to be channeled through Turkish and Indian state banks. China for its part has declared its opposition to sanctions against Iran.
debkafile's intelligence sources disclose that Tehran has set up alternative financial mechanisms with China and Russia for getting paid for its oil in currencies other than US dollars. Both Beijing and Moscow are keeping the workings of those mechanisms top secret.
I am not saying this story is true or if it false, but the potential for market-manipulating rumormongering in this is very large. Debka. Nuff said.
If this story was true the value of the US dollar would drop a lot today, did it?
Not good. Not good at all for the dollar.
This was news yesterday. Just because THIS story comes from Debka, doesn’t make the whole story false.
We think that we rule the world. We do not.
India and China need oil. Gold, dollars, rupees....doesn’t make any difference to them.
India: Muslims slaughter pregnant cow in Hindu temple compound
You cannot wire transfer gold and it’s supply is limited.
They cannot do this for long IMO.
There was a story yesterday about paying in Yen
If true, we may be going to war with india before we go against some ME regimes. I would be very surprised if we did not offer some major incentives to get India to back off this. It is a knife to the heart of the dollar and frankly makes me wonder WTH we are doing wasting any foreign aid on India (financial or tech) if they would do such a thing to US
Any country that is stupid enough to transfer it’s gold reserves to Iran in exchange for oil deserves what it gets.
Unless, of course, they are exchanging oil for gold at an astronomical exchange rate.
They will trade gold for oil as soon as they check the prices of gold and oil in US$ terms. Makes no sense. And China is a small time player in gold yet, hasn’t reached the level in gold reserves necessary for super power status.
Can’t really trust any one of the three countries. This should be interesting.
We’re all going to abandon FIAT currencies and go back 4000 years to doing all our trades in barter, because Iran and India might have made a barter arrangement? NOT!
Iran is trying to be clever. It’s gonna backfire.
250 tons of gold per year for India alone, I am not believing this.
India will go to war with itself if fuel prices go higher because of reduced supplies. They have an inflation crisis going on there, and reducing oil supply will only make it worse.
not good for the dollar ( pr what is left of it)....
True or not, this does not seem to be having much of an effect on the gold market today - up just .5%.
Nothing new here. India spent decades playing the US and the USSR against each other to its own benefit. Now, if true, India is doing the same to the US and the ME.
Knowing how India and China operate, I’m sure they also offered to only pay half the present price of Brent or WTI as well. They know how to use leverage when they have it.
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