Iran indicated on Friday that it wants to settle payments for its new and outstanding oil sales in euros and not in dollars or any other currencies.
Reuters has quoted an official from the National Iranian Oil Company (NIOC) as saying that the rule applies to newly signed deals with France’s energy giant Total, Spain’s refiner Cepsa and Russia’s Lukoil.
"In our invoices we mention a clause that buyers of our oil will have to pay in euros, considering the exchange rate versus the dollar around the time of delivery," the NIOC source, who has not been named, has told Reuters.
Iran has also told its trading partners including India that owe it billions of dollars that it wants to be paid in euros rather than US dollars, added the person.
The NIOC source further emphasized that the Central Bank of Iran (CBI) had instituted a policy while the country was still under sanctions to carry out foreign trade in euros.
"Iran shifted to the euro and cancelled trade in dollars because of political reasons," the source said.
Hossein Yaqoubi-Miab, the director for international affairs department of the Central Bank of Iran (CBI), said in December that Iran says it wants India to pay outstanding oil dues in euros, stressing that it needs the euros to pay the installments for the loans it has received for its infrastructure projects.
Yaqoubi-Miab added that preparations have already been made by Tehran to receive euro payments from India.
Indian refineries should pay equal to some $6.5 billion in outstanding oil dues.
Reuters has further added in its report that Indian officials are working on a mechanism that could involve local banks United Commercial Bank (UCO) and IDBI Bank for handling payments to Iran.
UCO CEO R.K. Takkar said the bank is involved in payments to Iran, but did not say if there were any plans to change the payment mechanism.