Iran eyeing “oil for gold” barter plan with Africa
As US sanctions against Iran loom large, the country is looking for potential solutions to maintain trade with other countries with a top official in Tehran now proposing to barter oil products for gold with Africa.
Publish date : Tuesday 31 July 2018 12:50
Hassan Khosrowjerdi, the president of Iran-Africa Council for Economic Cooperation, was quoted by media as saying that banking problems that the sanctions could create would be soon Iran’s biggest challenge for trading with other countries.
Khosrowjerdi said this could be resolved by establishing barter mechanisms with other countries, including those in Africa.
“African nations want cash payments for the products they sell others but Iranian merchants want to buy their required goods through installments,” he told a forum on Iran-Africa trade issues in Tehran in which ambassadors of Kenya, Algeria, the Ivory Coast, Mauritania and Ghana had also participated, as reported by IRNA.
The official emphasized that using bartering schemes was the best way to facilitate trade between Iran and Africa, specifically when the sanctions return.
Khosrowjerdi said one key item which Iran was specifically interested to the same effect was gold. Other items, he added, included meat and agricultural products.
In May, US President Donald Trump announced that he would pull America out of a 2015 nuclear agreement with Iran and re-impose the sanctions that the deal had envisaged to be lifted.
The sanctions would include a universal ban on Iran over buying or acquiring US dollars which will come into force on August 7 as well as restrictions over purchases of crude oil from the country and investing in its oil sector projects which will become effective by the start of November.
Khosrowjerdi did not mention any specific country with which Iran was considering to barter its products with gold.
However, Ghana – Africa’s second biggest gold exporter after South Africa – could be a primary target.
Based on previous reports by Iran’s media, Iran is exporting a wide range of oil products to Ghana including tar and various kinds of industrial oil.
Iran has been primarily buying gold from the UAE and South Africa with some reports already emerging in the media that the country has intensified its purchases of the precious metal over the past few years.
The price of gold has been surging to record highs in the Iranian market over the past few days. Based on media reports, each benchmark Emami gold coin – which has a purity rate of 90 percent and weighs 8.13 grams – in Monday’s trading was priced at a new record high of above Rials 47,000,000 ($394 with each Dollar at Monday’s average rate of Rials 119,000).
The Central Bank of Iran (CBI) has devised a series of mechanisms to calm the fever in Iran’s gold market. They include a plan to pre-sell gold coins with varying delivery grace periods that ranged from one month to a year.
The plan did help ease tensions in the market but the price of gold has been surging lately in tandem with the rising rates of the US Dollar against the Rial.