Iran profits from non$ oil sales

[mooncliff]

Or so they say...


TEHRAN, Oct 6, 2009 (Reuters) - Iran has made a huge profit from its policy of increasing its sales of oil for currencies other than the U.S. dollar, Central Bank Governor Mahmoud Bahmani was quoted as saying on Tuesday.
...
In late 2007, a senior Iranian official said the world's fifth-largest crude exporter had raised to 90 percent its proportion of non-U.S.-dollar oil sales.

http://www.reuters.com/article/usDol...6?rpc=401&

[GRG55]

Re: Iran profits from non$ oil sales

Or so they say...


TEHRAN, Oct 6, 2009 (Reuters) - Iran has made a huge profit from its policy of increasing its sales of oil for currencies other than the U.S. dollar, Central Bank Governor Mahmoud Bahmani was quoted as saying on Tuesday.
...
In late 2007, a senior Iranian official said the world's fifth-largest crude exporter had raised to 90 percent its proportion of non-U.S.-dollar oil sales.

http://www.reuters.com/article/usDol...91006?rpc=401&

Fun with numbers.

The crude they sell is still referenced to US Dollar denominated international benchmarks. So they are receiving fewer Euros and Yen per barrel than they were earlier this year.

The currencies they sell for [Euro and Yen] are freely convertable, so the Iranians themselves could sell their oil for Dollars and immediately convert the proceeds into Euro or Yen if they wished. I suspect it is their [legitimate] fear that the Americans will restrict their ability to convert Dollars in the future that caused them to implement a policy of avoiding that currency.

Finally, the "profit" assumes that the Iranians are socking away the oil receipts under one of their marvelous handwoven carpets, and playing the exchange rate changes. They may have been building surpluses during the peak of the price cycle last year, but I suspect the Iranians are spending on their national budget every Euro and Yen they are getting under the current economic situation.

Finally, given trade pattern shifts it makes sense for the Middle East oil exporters to sell more of their product in Euro and Yen. Back in the 1970s large amounts of the goods consumed in the region were sourced in the USA. Today the Gulf Arabs are buying more Mercedes and Toyotas than Cadillacs...far more.

[Slimprofits]

Re: Iran profits from non$ oil sales

The crude they sell is still referenced to US Dollar denominated international benchmarks.

Thought it may seem obvious, thank you for pointing this out.

[touchring]

Re: Iran profits from non$ oil sales

What's the bank charges for converting $1 billion usd into euro?

Fun with numbers.

The crude they sell is still referenced to US Dollar denominated international benchmarks. So they are receiving fewer Euros and Yen per barrel than they were earlier this year.

The currencies they sell for [Euro and Yen] are freely convertable, so the Iranians themselves could sell their oil for Dollars and immediately convert the proceeds into Euro or Yen if they wished. I suspect it is their [legitimate] fear that the Americans will restrict their ability to convert Dollars in the future that caused them to implement a policy of avoiding that currency.

Finally, the "profit" assumes that the Iranians are socking away the oil receipts under one of their marvelous handwoven carpets, and playing the exchange rate changes. They may have been building surpluses during the peak of the price cycle last year, but I suspect the Iranians are spending on their national budget every Euro and Yen they are getting under the current economic situation.

Finally, given trade pattern shifts it makes sense for the Middle East oil exporters to sell more of their product in Euro and Yen. Back in the 1970s large amounts of the goods consumed in the region were sourced in the USA. Today the Gulf Arabs are buying more Mercedes and Toyotas than Cadillacs...far more.

[GRG55]

Re: Iran profits from non$ oil sales

What's the bank charges for converting $1 billion usd into euro?

Less, much less, for a government than if you or I had to do it through our local S&L...