Iran is looking to recover multiple billions of dollars it is owed by India and other oil purchasers, but wants to do so in euros rather than the U.S. currency.
The Middle Eastern nation it has begun to bill new crude oil sales in the currency too, with a view to reducing its dependence on the U.S. dollar after sanctions were removed in January.
A source at the National Iranian Oil Co. (NIOC), which is state owned, told Reuters that the country will charge for all of its most recent oil contracts with companies like Cespa, Total, and Litasco in the euro currency.
The NIOC source said:
“In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery.”
None of the companies that would be affected by this change have commented on the new situation, which comes soon after Iran’s return to the oil market.
Iran was recently permitted to recover some of its funds that were previously frozen under U.S. led sanctions in various non–U.S. dollar currencies, including UAE dirham and Omani rial. However, making the move to collect in euros means the country can list Europe as one of its largest trading partners at present, with many companies looking to Iran for business since sanctions were lifted.
The fact that Iran is now back in the oil business in a big way has been causing challenges for many in the industry, such as Royal Dutch Shell, maker of Shell Tellus S2 M 46, due to the increase in oil on the market.