Iran to Trade Oil for Gold to Bypass Sanctions

Iran reportedly plans to skirt US and Euro sanctions by trading her oil for gold with India and China

From Debka.com (hat tip lewrockwell)

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, DEBKAfile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.

The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.

Iran's second largest customer after China, India purchases around $12 billion a year's worth of Iranian crude, or about 12 percent of its consumption. Delhi is to execute its transactions, according to our sources, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of Indian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey's seventh largest bank which is owned by the government.

If the major reason the US pushed for the invasion of Iraq and the overthrow of the Saddam Hussein regime was because latter had pushed for Iraq’s oil to be paid in Euros is true, then Iran’s oil for gold trade will likely presage a shared fate with her neighbor.

The other aspect here is the potential use of gold as money for transactions outside the incumbent banking-financial and political system or in the informal economy.

But of course, governments have already been restricting international gold flows. For instance South Korean authorities recently arrested men who tried to smuggle out gold by hiding it in their rectums.

Interesting signs of times.

Update: A source suggests that the DEBKA files or the source of the quoted news is run by Council of Foreign Relations (CFR), believed to a conspiracy group whose aim has supposedly been to uphold the interests of some well connected elites via control of governments, and some other network of war hawks. CFR has called for a war on Iran.

The implication is that I am not sure whether the news cited above represents a propaganda or a reported fact.