Iran will now be trading its oil to India for the barbaric relic known as gold rather than dollars.
According to a new and yet unconfirmed report, India bought oil from Iran using gold. India certainly has the gold resources to fund the oil, while Iran is under pressure by the West, due the continuation of its nuclear program.
There were reports that officials have been floating this idea for some time, and now, as the EU finally decided upon an oil embargo on Iran, more details became available, yet still pend confirmation.
Oil is priced in US dollars, and bypassing the greenback posed challenges for both parties. Two banks are reportedly involved in this deal: India’s state owned UCO Bank and Turkey’s state owned Halkbank.
Both banks don’t have any business with the US and therefore are less vulnerable to sanctions. According to the report, an Indian delegation has spent time in Tehran and finalized the details of the transactions.
The annual capacity of trade between these two countries is 12 billion dollars. With gold trading at around $1668, that is around 7.2 million ounces of gold.
The step joins Russia and Iran’s announcement to begin trading in their own domestic currencies rather than use the US dollar – a reserve currency.