Business | Oil & Gas
Cash-strapped Iran asks Japan to pay for oil in yen
Iran has asked Japanese buyers of its crude oil to switch payment to the yen from dollars as it faces growing pressure from the West over its nuclear programme, a customer said yesterday.
- Reuters
- Published: 00:04 July 14, 2007
London: Iran has asked Japanese buyers of its crude oil to switch payment to the yen from dollars as it faces growing pressure from the West over its nuclear programme, a customer said yesterday.
Tehran has been limiting dollar-denominated trade as Washington leads efforts to isolate the Islamic Republic over its atomic programme.
By May, Iran had raised the amount of its oil earnings in currencies other than dollars to 70 per cent.
Further gains
"Our company received a document from Iran asking Japanese lifters to switch the payment to the yen earlier this week," the customer said. The source was not aware when the company would change its payment currency.
The yen spiked higher on the news, with the dollar sliding to a session low of 121.93 yen from around 122.25 yen and the euro also falling to a session low of around 168.30 yen. The yen has since given back most of these gains.
Iran had informally asked its Japanese customers to switch to non-dollar payment several times since late last year.
But now the National Iranian Oil Company (NIOC) has made it an official policy and served written notice to its buyers, the customer said. Washington has slapped sanctions on two Iranian banks. United Nations sanctions have targeted one.
NIOC officials could not be reached for immediate comment.
Iran is the fourth largest oil supplier to Japan, shipping 323,000 barrels of crude per day in May, Japanese government data show.
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