The dollar in Iran is not used much, traders prefer alternative currencies for their transactions. There are no more reasons to continue making invoices in dollars, "said the spokesman of the Central Bank of Iran, Mehdi Kasreipur.
So Tehran responded to the actions of the US and its allies. In mid-March, Donald Trump prolonged sanctions against the Persian country. The European Union also agreed sanctions against the Islamic Republic.
The Iranian government called it an "economic conspiracy" led by Washington and banned the dollar.
It is a politically motivated decision. The transactions in dollars are made through US banks, which causes certain risks for Iran. Transactions in euros do not generate this type of risk, "commented Alexandra Razuváyev, director of the analysis department of Alpari.
A PAINFUL HIT
The Iranian response to the United States is not only the loss of its reputation, but also a painful economic blow for the North American country. Iran is the largest producer and exporter of hydrocarbons in the world, Naúmov noted.
A large part of the Iranian oil is bought by the countries of the European Union and China. In addition supplies are made to Russia. According to OPEC, foreign contracts for the sale of black gold bring Tehran more than 70,000 million dollars a year.
The use of the dollar in the world hydrocarbon trade guarantees the status of the world's main reserve currency.
The fact that Iran opts for the euro in oil transactions is an alarming signal for Washington, since it implies a reduction in the scope of the use of the dollar.
The journalist recalled that the US perceives it as a violation of national interests and usually reacts aggressively. "I do not know if it's a coincidence, but the refusal of Iraq and Libya to conduct oil transactions in dollars was followed by the overthrow of Saddam Hussein and Muammar Gaddafi," he said.
ANTIDOLAR QUOTATION
The dependence of the American currency, and, consequently, of Washington, bothers many oil exporters and importers today. Experts point out that in recent years a coalition has been formed to promote the de-dollarization of the global energy market. It already includes Russia, China and Venezuela. And now also to Iran.
Since 2016, the St. Petersburg International Business Exchange quotes Russian oil in rubles. Last year, Venezuela stopped accepting dollars to pay for oil and replaced them with euros. At the end of March, the Shanghai Stock Exchange began selling future oil contracts in yuan.
Russian Energy Minister Alexander Nóvak recently announced that Russia is considering the possibility of making oil payments in national currencies, particularly with Turkey and Iran.
Finam analyst Alexei Kaláchev recalled that there are no restrictions on payments in national currencies for bilateral trade between the two countries. In fact, for Russia, Iran and Venezuela is a way to avoid the risk of blocking payments in US dollars.
However, the fall of the hegemony of the US currency in the world energy markets is a long process, from 10 to 15 years.
To become an alternative to the dollar in energy transactions on a global scale, the national currency must be of free conversion and be on the list of reserve currencies. China is the country that is closest to the target when launching oil futures in yuan, "Kaláchev concluded.
