Iran and India have announced that they intend to settle all oustanding crude oil payments in rupees, as part of a joint strategy to dump the dollar and trade instead in national currencies. The Indian Express reports:
Ditching the dollar, Iran and India have agreed to settle all outstanding crude oil dues in rupees in preparation to future trade in their national currencies.
The dollar dues — $6.5 billion equaling 55 per cent of oil payment — would be deposited in National Iranian Oil Co account with Indian banks. Sources said work was underway to amend the agreement with Iran to allow entire crude oil payment to be made in rupees. “Finance Ministry is moving a Cabinet note on withholding tax exemption on oil payments,” they said.
Since 2013, Indian refiners have been depositing 45 per cent of their oil payments to Iran in rupees with UCO Bank and withholding the remainder after a payment route through Turkey’s Halkbank was stopped under US and European sanctions.
This is truly a bold move by Iran, a country literally surrounded by American military bases. We shouldn’t forget what happened to Iraq after it announced that it was dumping the dollar.
The difference, of course, is that Iran has a little friend called “Russia”.