The world’s fourth largest oil exporter, Iran, is seeking payment for oil sales in euros as it shifts currency reserves out of dollars. The State-owned National Iranian Oil Company (NIOC), acting under instructions from the Central Bank of Iran, has inserted a new clause in oil supply contracts that allows it to request payment in euros or other currencies.

As a result, about 57 percent of Iran’s income on crude exports of 2.38 million barrels per day (bpd) is now in euros. “The payment clause now gives the option to NIOC, as seller, to receive currencies other than the dollar as payment due to the monetary policy of Iran vis-a-vis a weakening dollar,” said Hojjatollah Ghanimifard of the National Iranian Oil Company. “But our oil contracts are still based on the dollar because the international market assessments are in US dollars.”

Iran exports about 63 percent of its crude to Asia, with the remainder sold to Europe and Africa. A small portion is sold into South America. The United States has banned imports of Iranian crude since 1995.