July 4, 2018, by Arsalan Shahla and Anthony DiPaola
Iran said it’s open to resuming barter payments for oil as U.S. sanctions threaten its access to the global financial system, reviving a method used during a previous wave of sanctions earlier this decade.
OPEC’s third-largest producer is unable to bring in dollars or euros in exchange for crude because of “banking problems,” Asadollah Gharekhani, the spokesman for Parliament’s energy commission said, the Iranian Labor News Agency reported. It will accept as payment goods including medical equipment and agricultural products. “We have informed our oil customers that we will only buy their commodities if they buy our crude,” Gharekhani said.
Iran resorted to barter during the last round of U.S. and European sanctions that were in place from 2012 to 2016. At that time, the sanctions restricted the amount of oil consumers could buy from Iran and used financial constraints to keep payment for the crude in escrow accounts in the purchasing country.
In 2016, after sanctions were eased, Iran continued to swap crude for refined products it needed for domestic transport. This time, U.S. President Donald Trump has said he wants crude buyers to halt all purchases of Iranian oil and is asking Saudi Arabia, the world’s largest exporter, to raise output to make up for lost production.