Iran ‘Oil For Gold’ Scheme Circumvents Sanctions

Iran is trading oil for gold in a new strategy to circumvent crippling Western sanctions against the Middle Eastern nation for its nuclear program.

Turkey has been giving Iran billions of dollars worth of gold in exchange for energy supplies, according to Ali Babacon, Turkey’s deputy prime minister, reports CNN.

Babacan stated during a parliamentary budget commission meeting this month:

“When Turkey buys Iranian oil, we pay for it in Turkish Iira … However it is not possible for Iran to take that money as dollars into its own country because of international restrictions, the U.S.A.’s sanctions. Therefore, when Iran cannot take this money back as currency, they withdraw Turkish Iira and buy gold from our market. They take the gold back to their own country.”

Iran has been successful so far with its oil for gold scheme, as Turkish government statistics show that Iran has important billions of dollars in gold from Turkey since it was first ejected from the SWIFT international electronic banking system in March.

Reuters notes that the US Senate may soon consider even more sanctions against Iran aimed at reducing global trade with Iran in the energy, shipping and metals sectors.

One senior aide commented that the move would end “Turkey’s game of gold for natural gas.” The US and European banking sanctions against Iran mean that there can be no payments to Iran using US dollars or euros. When he was asked about the possible new sanctions, Turkey’s Energy Minister Taner Yildiz stated:

“I’m not of the view that there will be any negative situation, a clash with the USA, regarding natural gas, oil and mining. We are talking to the USA.”

While Iran has a very difficult time making monetary transfers into its country, the oil for gold scheme is the best way to circumvent the sanctions.