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Iran is accepting renminbi for some of the crude oil it supplies to China, industry executives in Beijing and Kuwait and Dubai-based bankers said, partly as a consequence of US sanctions aimed at limiting Tehran’s nuclear programme.
Tehran is spending the currency, which is not freely convertible, on goods and services imported from China.
Most of the oil that goes from Iran to China is handled by the Unipec trading arm of Sinopec, China’s second-largest oil company, and through another trading company called Zhuhai Zhenrong, the oil industry executives said.
The trade is worth as much as $20bn-$30bn annually according to industry estimates, but a share of it is in barter form. Zhuhai Zhenrong, for example, pays Iran for its oil by providing services such as drilling, these people add
“The global financial crisis accelerated the shift from the west to the east,” said the chief executive of one bank in Dubai. “Such measures [as the US sanctions against Iran] will now enhance the acceptability of the renminbi as a transaction currency.”
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The RMB purchases began some months ago. Initially the non-barter portion of the transactions were settled in Beijing through renminbi accounts but now, as a result of US pressure, domestic banks such as Bank of China have stopped dealing with Iran, the oil executives and bankers said.
Instead, much of the money is transferred to Tehran through Russian banks, which take large commissions on the transactions, these people said.
