India Offers To Pay For Iran Oil With Gold

Tyler Durden's picture

It appears that gold isn't really a currency... until it is. The Economic Times reports that India is attempting to ensure steady crude oil supplies from Iran. In doing so it is doing everything it can to pay Iran in a way that avoid loopholes associated with recent US sanctions. And the stunner: "India could settle crude oil import transaction using gold in the short term, while efforts to resolve the deadlock continue." But does Iran realize they can't possibly eat all that gold? Or that The Fed has no way of diluting to oblivion? Or that, unlike the dollar, it is currently not involved in a global race to bottom in which every central bank will have no choice but to print ever more of its linen-infused currencies? Something tells us that the answer to all three is yes.

From Economic Times:

India is determined to ensure steady crude oil supplies from Iran and is even considering settling payments with gold in the short term before the two countries agree on a mutually accepted currency and a bank to clear the transactions.

"We have written a letter to NIOC ( National Iranian Oil Company )) asking it to suggest a bank where US sanctions are not applicable," a government official involved in the matter said requesting anonymity.

Another official said India could settle crude oil import transaction using gold in the short term, while efforts to resolve the deadlock continue. An Indian delegation, including officials from ministries of external affairs, finance and petroleum, will visit Tehran next week to thrash out the payment issue, officials said.

Oil industry officials are keenly awaiting a solution as India imports 80% of the 184 million tonne of crude oil it refines every year, and Iran accounts for 16% of these purchases, making it the second-biggest supplier, after Saudi Arabia.

India's crude oil imports from Iran faced an impasse after the Reserve Bank of India declared that a regional clearinghouse that involved the Iranian central bank could no longer be used to settle oil and gas transactions between the two countries.

It appears that it was the United States which itself precipitated this decision to seek potential alternative "currencies"

Several analysts believe India had acted under the pressure of the United States, which has lauded the RBI's action. Last year, India had protested Iran's remarks on Kashmir, and earlier, India had voted against the country's nuclear programme in a resolution of the International Atomic Energy Agency.

Domestic oil companies faced the crisis after the Reserve Bank of India (RBI) discontinued a settlement through the Asian Clearing Union (ACU) for crude oil payments to Iran. ACU, an initiative of the United Nations Economic and Social Commission for Asia and Pacific (ESCAP), was established in 1974 at Tehran for promoting regional co-operation. It facilitates payments among member countries for eligible transactions on a multilateral basis. The model helps in economising the use of foreign exchange reserves and transfer costs.

Ironically it is the US' desire to maintain political hegemony that may just be the catalyst that forces other countires to realize that transacting in a currency which is less and less deserving of a reserve moniker, is greatly overvalued.

h/t Mike Krieger

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barkster's picture

everything old is new again

DoChenRollingBearing's picture

This story for me raises a topic discussed a bit here on ZH about whether or not India took physical possession of the +/- 200 tonnes of gold they bought from the IMF in late 2009.

If they did not take possession, will they be able to pay Iran with paper gold?

If Iran and India do oil for (physical) gold trading, then we would likely find out soon.


spartan117's picture

AIG getting monkey hammered and down 6%.  X down 10% in the last few days.  Where the fcuk is Spalding_Smailes???

1223pm's picture


The RACE has started. No country has enough Gold to backup their currency.

Who ever declare first that their currency is backed by the the Gold will Have to devalue and will be the winner.

TheGreatPonzi's picture


NotApplicable's picture

But apparently you can buy oil with it. Question is, other than WTI, just how long will that remain true in dollars?

DaveyJones's picture

...and food is oil, therefore, you can eat gold 

Sudden Debt's picture

REAL question is, WHEN will they ALL ask GOLD FOR OIL


Steaming_Wookie_Doo's picture

That will be the "rapidly downloading brownware in the trousers" moment for the Anglo-American oligarch crowd. Of course the decadent Saudis will keep taking Uncle Sam's toilet paper (until the they're overthrown). What will the US do then? Invade Canada for its oil?

Mr Lennon Hendrix's picture

They trade oil for gold, you can eat oil, you do everyday.  You eat oil.  Oil eater!  So while you are eating oil, they trade oil for gold.  Gold wins!

Oh regional Indian's picture

Lennon H, the funny thing is that your statement is actually true for all of us. We do eat oil. Only it looks like a fruit or a vegetable or some such.

Standing joke with my Fruit/Veggie vendor. I always ask him where the produce I'm buying comes from. 60% of the fruits on his stand are from outside India. Quite stunning for a so-called agrarian economy eh? Apples from Washington/Cali/NZ. Pears from South Africa. On and on. Shiny, tasteless fruits and vegetables, coming to us from lands far far away.

So yup, we're all oil eaters, most just cannot see it.


SilverIsKing's picture

You can't wipe your ass with gold.

tmosley's picture

Hehehe, he doesn't know how to use the three shells.

Rich guys use shells made of gold.

SilverIsKing's picture

Thanks for clearing up what my wife got me for Christmas.  I couldn't figure it out.

Temporalist's picture

That is the "Great American Shell Game" brought to you by Ponzi Bros. (otherwise known as The Federal Reserve).

maneco's picture

True! But you can buy oil with it and everything else including food.

unwashedmass's picture


i don't know why Ben doesn't offer them Bank of America stock...i mean, he's throwing billions into using it to jack stocks higher...

CNBC told me if BAC goes higher, so does the market...

let's offer that to the Iranians.

Monkey Craig's picture

Prosperity? Tell that to the millions on food stamps.  Tell that to the moms and dads who stay up at night because they have trouble with the utility bills.

Shylockracy's picture

"The FED has given us prosperity."

"Fractional banking is a good thing, folks. So is inflation."

HamyWanger, you are just like HarryWanger, only with a sense of irony. Well done!


JonNadler's picture

why don't you guys cut it out with all these parodies already

Robot Traders Mom's picture

Alright Harry, break time is over. Those Big Mac's aren't going to microwave themselves.

pointer's picture

Nice opinion. Did you borrow it from Glen Beck or was it Hannity?  How does a gold standard promote know what - nevermind - you're just a troll spouting off irational things with no rhyme or reason as to why you think so.  If you were required to give a detailed and constructive answer I'm sure you would NOT post anything at all.

The real questions is...

Should man play in a society run by laws of nature - limited supply on resources, such as a gold standard - where gold can't be printed...or should man play by another group of men's biased rules and regulations (arbitrary bullshit printed on thousands of pages of "bills" and "laws") with little oversight that forces the masses to absorb their fuck ups?

Also - how does a gold standard promote racism - there are no Mexicans, Blacks, Chinese or Indians on our national currency - the USD.  What's up with that?  How racist!

lawrence1's picture

Pointer, you are wasting your time reasoning with type like Wagner, Johnny Bravo, etc.  They are intellectual virgins, not wanting their views tained by information, muddled by reasoning.  They are going to remain ignorant and proud of it.  Let them be; to repond is to encourage them.  Dont even junk them, that's encouragement too.  I guarantee you that if nobody responded at all to guys like this, they would go elsewhere.

digitalhermit's picture

LOL - you are cracking me up "Hamy"!

I don't think anyone else got the joke... So I wonder where is the real Harry? :-)

barkster's picture

he accepted a job at kitco...

godgunsandgold's picture

What I've read about Loughner, he's a pot smoking Left Wing nut job.

grey7beard's picture

Where are you reading this?  I've seen several folks make this claim but theres' never been anything to back it up.

lawrence1's picture

Friend, where did you get the idea that these guys who love to talk about left wing nuts, etc.,

feel the need to have a basis for the assertions?  They dont follow the traditional rules of debate, reasoning, research.   Did he back it up?

Stormdancer's picture

Interviews with Loughner's aquaintances consistently paint him as left will probably give you a few examples.

Eric The Red's picture

Or he's a tea party, gold bug, gun totin' Right Wing nut job.  Take yer pick.  Either way, the  only part that fits is "nut job".

johnnynaps's picture

He was. What they are not telling you on Faux news is that his drug dealer started requesting payment in gold. He then lost it because he only had fiat currency and vowed a payback.

Hulk's picture

Loving it Hamy, you have Harry down to a tee...

gangland's picture

what the hell happend to his comments??

gdogus erectus's picture

Just when I think I've figured you out (entertainment inserted by Tyler) you pop off with this stuff.   Hmmm, trying to sway a couple newbies to this site back to the dark side?  Man, that would be a waste of tax dollars.  Anyway, thanks for the grins!  Edit:  Ahhh yes!  The Hulk got it.  Ok, thanks again for the grins.  Too freakin' funny.

Missing_Link's picture

This piece of news just proves India deserves its poverty.




Basically, I am junked for saying what any sane and intelligent person would say.

I offer the pair of mutually contradictory statements above as proof of Harry's insanity and lack of qualifications to engage in rational, intelligent discourse.

gangland's picture









wanger you're such a fucking troll asshole, shut the fuck up dude

edotabin's picture

I just wonder why many bother to set an alarm clock in the morning.

Hephasteus's picture

If you can't properly question sincerity. Then you're gong to be confused by alot of things that go on around here. If you have the functioning equipment to question sincerity then peoples blood and guts and being hurt is going to make your job difficult.

RockyRacoon's picture

I'm still chuckling about how Hamy got 40 junks. 

Folks are gullible, but the sad part is:

1. They "invest" in markets.

2. They get to vote.

Save us all....

StychoKiller's picture

Reedin' comprehenshun...tres difficile, mai non?

Sands8oo's picture

Fuckwad of the first order signing in...


We read you loud and clear Sir, loud and clear.  And in other news Mr. HamWang of Washington DC is said to have been found w/ a 100oz LBMA good-delivery gold bar shoved up his asshole... Shame was, it turns out it was only tungsten...

Cheers mate and all the best to you!

Yours Truly,

Nathan Wind

Arius's picture

perhaps, they might pay with gold paper certificates...? may be???

Temporalist's picture

If you read the comments there you will see how far Au and Ag are from  bubbles.

Blindweb's picture

Locks on your doors are a barbarous relic, with no place in a free and enlightened society.  I guess you have such faith in your fellow man that you don't think you need that form of restraint either.



mark mchugh's picture

External Debt per capita (as of December 2009):

United States - $43,758

India - $187

Iran - $253

Who's poor?


I don't know anything about Iran, but I have noticed that countries with lots of oil and very little debt always seem to make it to the top of our enemies lists.