TEHRAN (PIN) – Marketing manager of National Iranian Oil Co. here Tuesday said the NIOC told all oil purchasers in Japan to replace dollar with yen in their deals.

Mohammad-Ali Khatibi told PIN that some Japanese had followed the policy, adding Nippon Oil was not the sole refinery that was paying yen instead of dollar for importing Iran’s oil as other refineries of Japan were buying the commodity in yen.
He said some Japan-based purchasers of Iran’s oil had requested for a couple of months to shift the payment policy.
Khatibi said over 70 percent of Iran’s crude oil was now sold in euro and yen instead of dollar.
Given the fluctuation and weakening trend of dollar in the recent years, Iran decided to receive the least amount of dollar as revenue in its international deals, asking its customers to change their currency policy.
Iran is Japan’s third biggest oil supplier, standing after Saudi Arabia and the United Arab Emirates.
Iran has been increasingly selling oil in currencies other than the U.S. dollar, which has fallen in value.
Last year, Iran inserted a clause into oil contracts enabling it to require payment in currency other than the U.S. dollar.
Iran and other countries that rely heavily on oil exports have been hard hit by the decline in the dollar’s value. The move is not intended to change the original value of the oil contracts being traded.
Hojjatollah Ghanimifard, international affairs director of National Iranian Oil Company (NIOC), told Reuters in July that Iran wanted to maximize oil export revenue in non-U.S. dollar currencies while the dollar stayed weak.
Ghanimifard also confirmed that Tehran had asked customers in Japan to pay for their crude oil in yen instead of dollars.
“As long as the dollar is weak, the best decision is for us to move away from it and we will want as much revenue as possible in non-U.S. dollar currencies,” he added.
“This is not a political gesture,” said the NIOC official. “We’re losing our purchasing power if we stick with the dollar.”
The NIOC is asking customers in Japan -- all of whom previously bought Iranian oil in dollars -- to open letters of credit in yen, the official said. The state oil company will also issue its invoices in the Japanese currency.
Iran, OPEC’s second biggest producer, exports around 2.3 million barrels per day (bpd) of crude, with up to 65 percent of that volume moving into Asia.
Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros. UPI believes Iran policy to shifting to euros and yen allows Iran some relief.
“In general, a key motivation is the U.S. informal sanctions pressure that the Treasury, and Undersecretary Stuart Levey in particular, put on banks not to do financial transactions with Iran. And increasingly designating banks with ties to certain Iranian entities as unable to perform the U-turn transactions for dollar-denominated transactions,"" according to David Kirsch, the manager for market intelligence at the international energy consultancy PFC Energy.
U.S. Treasury Undersecretary for Financial Intelligence Levey has been in charge of coordinating U.S. sanctions against Iran since 2004. In recent months the U.S. Treasury has increased pressure on foreign banks not to deal with sanctions against Iran, including so-called U-turn transactions, which allow U.S. banks to process payments involving Iran that begin and end with a non-Iranian foreign bank, according to the U.S. Treasury.
“Shifting to euro and yen, overall it does lower some of their exposure to this informal pressure from the U.S.,” Kirsch said