China buying oil from Iran with yuan

China is buying crude oil from Iran using its currency the yuan, an Iranian diplomat has said.

Oil transactions are usually settled in dollars but US sanctions make it difficult for Iran to accept payments in the US currency.

Iran is using the revenue to buy goods and services from China, Mohammed Reza Fayyad, Iran’s ambassador to the United Arab Emirates, confirmed.

China is the biggest buyer of Iranian crude oil exports.

The country buys some $20bn-30bn of oil from Iran each year, but the US has been pressuring Beijing to join an international boycott of Iran over Tehran’s nuclear programme.

The Iranian ambassador’s comments, reported by the Reuters news agency, confirmed a report in the Financial Times that claimed that Unipec – a subsidiary of the Chinese state-owned oil firm Sinopec – was buying the oil, as was another company called Zhuhai Zhenrong.

Meanwhile, China has been trying to promote usage of yuan as an international currency as a rival to the dollar, including the establishment of a new offshore trading centre in London alongside the existing centre in Hong Kong.

According to the FT report, China has been providing the currency to Iran via Russian banks rather than its own domestic banks.


BBC has the full article

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