DUBAI: Sanctions have pushed the Islamic Republic to accept part-payment in the Chinese currency. While the yuan may play a big role in crude settlements by the end of the decade, trading restrictions and Gulf politics suggest Iran's shift won't be the catalyst for broader acceptance. Full view will be published shortly.
Iran is accepting yuan for some of the approximately $20 billion worth of crude the OPEC member supplies to its main client, China, annually, an Iranian diplomat said on May 8.
The Financial Times on the same say reported that China for months has been transferring renminbi to Tehran through Russian banks to pay for Iranian crude. OPEC's second largest oil producer was using the currency to spend on goods and services imported from China.
China's two major Iranian oil buyers, Sinopec Corp and Zhuhai Zhenrong Corp, have been paying mostly in euros for the roughly 520,000 barrels per day of supplies they receive.
Chinese companies started paying in euros for their Iranian crude in 2006.
In January, China and the United Arab Emirates signed a currency swap agreement worth 35 billion yuan ($5.4 billion). The deal is effective for three years.
China will overtake the United States as the world's largest oil importer in 2018 and as the top oil consumer in 2027, according to BP.
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