|iran, USA: Dealing with US sanctions
| Undaunted by American pressure, Iran’s finest oil minds are maneuvering their way around efforts to restrict Teheran’s export revenue. Leading attempts to isolate the Islamic Republic over its atomic energy program, Washington last year imposed sanctions on two Iranian banks and is pressing for a third set of punitive UN measures.
Hojjatollah Ghanimifard of the state-run National Iranian Oil Company (NIOC) has said Iran, the world’s third biggest oil exporter, would always find a way to carry on the trade that earned the country 70 billion dollars last year. “Iran has worked around America’s pressure on our oil transactions”, said Ghanimifard, international affairs director at NIOC. “We are disarming those who made threats against us”.
As a first step, Teheran had by last autumn cut all ties with the dollar. Washington, in turn, leaned harder on international banks. Some European banks bowed to the pressure by refusing to open letters of credit-a standard form of payment guarantee in the oil trade. “That didn’t hurt us. We found other banks”, said Gihanimifard.
He added Iran had shifted away from using some European banks to ones in other regions and had also begun using different methods of payment. “We’ve changed the list of acceptable banks we deal with and are using more non-traditional means of arranging payment”, he explained.
He declined to identify the new banks or those who had stopped dealing with Iran.
Industry sources say major French banks (Calyon, the investment banking arm of Crédit Agricole, Société Générale, BNP Paribas), Switzerland’s UBS and Germany’s Deutsche Bank, as well as Chinese banks have withdrawn credit lines.
A buyer of crude or refined oil products is usually required to open a letter of credit from a leading bank with which the seller does business to guarantee payment. The bank charges a fee and can net a share of the oil revenues, and the NIOC official said banks would miss the business. “Who’s getting hurt? We’re not losing one single cent of our income. This is money they have lost”, he commented.
Letters of credit are not the only solution. Other payment instruments are available to Iran, according to Ghanimifard.
Some bankers in the Middle East have said it was also possible to use front companies that are not banks as guarantors. n
At stake are payments for oil exports that averaged 2.45 million barrels per day.