Iran to stop using US dollar for oil prices

Iran is planning to stop using the U.S. dollar to price oil, with less than half of its oil income now paid in the U.S. currency, Iran's central bank governor said.

Photo: Iran to stop using US dollar for oil prices

"That's the plan for the future, we are working on that," Governor Ebrahim Sheibany said in an interview with Zawya Dow Jones News Service late Tuesday when asked if Iran was planning to stop pricing oil in dollars. He was speaking on the sidelines of an Islamic finance forum in Kuala Lumpur, Malaysia's largest city.

In global markets, oil is priced in U.S. dollars per barrel.

"More than 50 percent of Iran's oil income is paid in other currencies. We are reducing the dollar share and asking clients to pay in other currencies," Sheibany said.

Sheibany said that almost all of Iran's European clients and some of its Asian customers have accepted making payments in non-dollar currencies.

"Even if we get dollars, we directly convert it to other currencies. Japanese don't mind paying us in yen, for example," he said.

Sheibany noted that Iran has earned more than US$45 billion (EUR 34 billion) from oil sales during the current fiscal year, which ended March 20.

Washington is leading efforts to isolate Iran over what it claims is Tehran's bid to build atomic bombs. The United States has imposed sanctions on two big state banks and has urged international firms to avoid doing business with Iran.

Iran, the world's fourth-biggest oil exporter, insists its nuclear plans are aimed at producing electricity so it can conserve its oil and gas resources for export, and also to prepare for the day when its huge energy reserves run out.

Iran is doing fine without economic relations with Washington, and it has "perfect control" in keeping its currency stable, Sheibany said.

"We do not have any problem. We are trading with more than 70 countries, including (in) Asia and Europe," the governor said.

Iran's central bank is also shifting to holding its foreign reserves in a basket of 20 currencies and away from U.S. dollars, which now make up less than 20 percent of the reserves, Sheibany said.

Sheibany had left Malaysia on Wednesday and was not immediately available for other details.