Iran Asks Japan To Pay For Oil With, Yen Not Dollars

July 15, 2007

The Japan Times

Compiled from Kyodo, AP



Iran has asked Japanese oil wholesalers to pay for their oil purchases in yen instead of dollars, which are currently used for most transactions, industry sources said Saturday. The request by the National Iranian Oil Co. is believed to be part of Iran's efforts to increase oil transactions denominated in currencies other than the dollar to avoid a possible seizure of its assets by the U.S. government amid tensions over its nuclear development program.



The Iranian state-owned oil company sent letters to Japanese oil wholesalers requesting them to pay in, yen the sources said, adding some companies received such requests through trading houses.



"We have yet to decide how to respond," said an official at one wholesaler. "We cannot find any advantage in switching to yen-based transactions."



Late last year, Iran sounded out Japanese oil firms about switching their payments to the yen or the euro, the sources said.



Tokyo has been reducing its Iranian oil imports amid the nuclear standoff. Still, Japan imported about 28 million kiloliters of crude oil from Iran, which accounted for about 11 percent of Japan's total oil imports, in 2006.



Tehran has refused to halt its uranium enrichment program, despite the threat of U.N. sanctions, saying it only wants to produce electricity. The U.S. accuses Iran of trying to develop nuclear weapons.



Iran has already taken other measures to reduce its dependence on the U.S. currency. Earlier this year, Tehran announced it had started pulling its foreign currency accounts out of European banks to protect its assets from possible sanctions.