Iran says 70% of its oil sales are now outside dollar

By Peg Mackey
Reuters
Saturday, May 26, 2007

http://www.reuters.com/article/worldNews/idUSL2662075520070526

TEHRAN -- Iran, embroiled in a row with Washington over its nuclear program, has increased the amount of its oil export earnings in currencies other than U.S. dollars to about 70 percent, an Iranian official said on Saturday.

The figure is up from 60 percent cited in March for Iran's non-dollar oil export income and reflects the No. 2 OPEC producer's policy of reducing exposure to the greenback.

"About 70 percent of our oil export income is now in currencies other than the U.S. dollar," Hojjatollah Ghanimifard, international affairs director of the state-owned National Iranian Oil Co. (NIOC), told Reuters.

"If the dollar gets weaker, we will increase that percentage," said Ghanimifard, who in March had cited a figure of 60 percent for Iran's oil export income in other currencies.

Iranian officials have said they are seeking to limit dollar-denominated trade. The central bank governor has said Iran was seeking to "distance" itself from dollars and held just 20 percent of its foreign reserves in the U.S. currency.

"We are following our government's monetary policy not to depend on the weak U.S. dollar," Ghanimifard said, speaking on the sidelines of a conference in Tehran organized by Iran's Ravand Institute for Economic and International Studies.

The United States has been leading efforts to try to isolate Iran over its nuclear program, which Washington says involves a covert plan to make atomic bombs, a charge Tehran denies.

Washington has slapped sanctions on two Iranian banks, a move that unnerved some international banks working with Iranian businesses and prompted many to halt dollar transactions. U.N. sanctions have added to worries by targeting an Iranian bank.

"The U.S. administration has tried to deprive NIOC of money. We have found other ways to compensate for the shortfall. Proof of that is that our oil production capacity and production of gas and petrochemical products have increased," Ghanimifard said.

"A chunk of money came from the Oil Stabilization Fund (OSF) and some from an additional budgetary hard currency allocation to NIOC," he said.

Iranian media said this week Iran planned to use foreign exchange reserves to finance a $2 billion development of parts of its South Pars gas field after a French bank pulled out.

The OSF, a fund set up to save windfall oil earnings in times of need, forms part of the country's foreign reserves.

Industry sources say Iran now produces about 4 million barrels per day (bpd) of oil and exports about 2.4 million bpd. In the year to March, Iran earned about $53 billion from its oil exports, an oil official said.

Ghanimifard said that figure could be higher in the current Iranian year to March if oil prices continued to rise.

Benchmark Brent crude is now hovering around $70 a barrel, within sight of last year's record highs. Iranian crude tends to trade several dollars below Brent prices.

* * *

Join GATA
at the
World Gold, PGM, and Diamond Investment Conference
in Vancouver, British Columbia, Canada
Sunday and Monday, June 17 and 18, 2007

http://www.cambridgeconferences.com/ch_june2007.html

* * *

Help Keep GATA Going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at www.GATA.org. GATA is grateful for financial contributions, which are federally tax-deductible in the United States.