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Iran negotiating with China to unblock EUR 22 billion of assets - ASHARQ AL-AWSAT English Archive
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Iran's Parliament speaker Ali Larijani sits during an open session of Parliament in Tehran, Iran, on Sunday, May 5, 2013. (AP Photo/Ebrahim Noroozi)

Iran’s Parliament speaker Ali Larijani sits during an open session of Parliament in Tehran, Iran, on Sunday, May 5, 2013. (AP Photo/Ebrahim Noroozi)

London, Asharq Al-Awsat—Iran and China will reach an agreement to unblock up to EUR 22 billion of Iranian assets, mainly from oil export revenues, as a result of Iranian parliamentary speaker Ali Larijani’s high-profile visit to China last week, Iranian media are reporting.

Hassan Sobhani-Nia, an MP and member of the administrative board of Iran’s parliament, announced on Saturday that “Chinese officials have agreed to finance some $20 billion in Iran in lieu of the blocked assets in China which belong to the Islamic Republic,” according to the Tasnim news agency.

Sanctions imposed by the United States have blocked US dollar-denominated transactions with Iran. One of the measures Iran has been taking to work around the economically devastating sanctions is having payments for oil it exports to China deposited in yuan renminbi in Chinese accounts, and then using the funds to purchase permitted goods, such as food and consumer products, from Chinese companies.

In their coverage of the deal, Iranian media having been widely quoting the latest OPEC monthly market report, which reiterated that China recently overtook the US as the world’s largest net oil importer. The report estimates that China has imported 16.01 million tons of Iranian oil during the first nine months of 2013—428,160 barrels per day. This is a 17.54 percent increase in Iranian oil imports by China over the same period last year.

At the top of Larijani’s agenda for the China trip was establishing mechanisms for accessing the oil revenue, Iranian officials said.

Larijani met with Chinese president Xi Jinping on Wednesday to discuss ways to expand Iranian–Chinese collaboration on economic and political issues.

China and Iran have expanded their economic relations despite US and UN Security Council sanctions. It is reported that Iran is the third-largest supplier of crude oil to China, providing it with 12 percent of its total annual consumption, and the volume of bilateral trade easily surpasses USD 40 billion.

Sobhani-Nia also announced that USD 100 billion of Iran’s money is frozen in foreign banks because of the sanctions, but confirmed that Iran possess gold and hard currency worth up to USD 30 billion, the Tasnim news agency reported.

During his trip, the Speaker of Parliament also met with other high-ranking officials to express Iran’s desire to expand cultural and parliamentary relations with China.

In a separate meeting with Chinese business leaders in Shanghai on Wednesday, Larijani invited investment in high-tech projects in Iran.