Beijing to pay for Iranian oil, gas in cash

/By AzerNews/

By Sara Rajabova

Iranian official has said Tehran and Beijing have agreed that China would pay in cash for the oil and gas it buys from Iran.

Asadollah Asgar Oladi, the head of Iran-China Chamber of Commerce said under the agreement made with Chinese officials, it was settled that after deducting a sum as commission, the rest will be paid to Iran in cash or given to a third country for imports.

He said the agreement came after Iran requested some of the oil and gas money to be paid in cash and some to be transferred to countries like South Korea and Japan for purchasing goods, Tasnim news agency reported.

China is the biggest buyer of Iran’s crude oil, purchasing more than 440,000 barrels each day, but Tehran imports goods instead of hard currency for its oil sales under the previous contract.

Under the deal between Iran’s Ministry of Petroleum and the Chinese government, 65 percent of the oil money will be used to import goods and the remaining 35 percent will be paid in cash, according to Asgar Oladi.

Iran can sell around one million barrels per day of oil under a preliminary nuclear agreement reached in 2013 but the country has to use a maze of routes to receive its money.

Asgar Oladi, however, said there is no problem for payments of the oil money by the Chinese, without specifying the currency in which the two countries are trading.

He also announced that there is a plan where Iran and China would jointly produce goods, part of which would go to the Iranian market and the other part to Asian markets as defined by China.

China is also Iran’s biggest trade partner. Iranian official said annual transactions border around $52 billion, with Iran’s exports accounting for 55 percent of the trade and import of goods and services for 45 percent.

He said transactions will grow 20 percent every year under Iran’s vision plan irrespective of the results of nuclear talks, which are currently at the final stretch.

Iran exported 8.28 million metric tons of non-oil goods, worth $2.7 billion to China during the first four months of 2015.

China is seen as Iran’s biggest economic partner. The Islamic Republic is currently providing nearly 12 percent of China’s annual oil consumption, standing as the third largest crude supplier of world’s second biggest economy.

Back in March, a senior Iranian trade official announced that Tehran and Beijing seek to bring the level of their trade exchanges to $60 billion from the current $52 billion in a year or so.

China was the main importer of Iranian goods in the mentioned period. Beijing’s imports accounted for 23.3 percent of Iran’s total non-oil exports in terms of value and 34 percent in terms of volume.

China was the main exporter of goods to Iran in the mentioned period. Beijing’s exports accounted for 24.8 percent of Iran’s total imports in terms of value and 12.2 percent in terms of volume.