Iran Ready to Accept Non-Dollar Payment for Oil Export

Iran's central bank said oil export payments are not limited to the US dollar, highlighting greater flexibility as negotiations with Washington move forward

1. Iran seeks freedom from dollar-only oil payments

o Iran’s Central Bank Governor, Abdolnaser Hemmati, said Iran wants the flexibility to receive oil export payments in any currency, not just the US dollar.

2. Part of a broader de-dollarisation effort

o The move reflects Tehran’s strategy to reduce dependence on the US dollar and mitigate the impact of financial sanctions.

3. Flexibility in transport and settlement

o Iran intends to retain discretion over both the transportation of oil exports and the currencies used for payment settlements.

4. Linked to renewed US-Iran negotiations

o The statement comes amid reports of discussions between Iran and the United States regarding sanctions relief, release of approximately $12 billion in Iranian assets, and easing restrictions on Iran’s oil sector.

5. Potential reopening of Iranian oil supplies to India

o Any relaxation of sanctions could allow India to resume significant imports of Iranian crude oil after years of disruption.

6. Historical importance of Iran for India

o Before US sanctions intensified in 2019, Iran supplied around 11.5% of India’s crude oil imports and was among India’s major energy partners.

7. Logistical advantages for India

o Iranian crude offers shorter shipping routes to India compared to several alternative suppliers, reducing transportation costs and delivery times.

8. Favourable credit terms from Iran

o Iran had historically provided Indian refiners with credit periods of 60–90 days, significantly longer than the roughly 30-day credit commonly offered by many other suppliers.

9. India adapted through alternative payment systems

o Following sanctions, India diversified payment mechanisms for energy imports, particularly for Russian oil, using currencies such as rupees, dirhams, yuan, dollars, and occasionally roubles.

10. Growing trend of multi-currency energy trade

o Iran’s proposal reflects a wider global shift toward settling energy transactions in multiple currencies rather than relying exclusively on the US dollar.

11. Benefits of rupee-based settlements

o For India, using local-currency arrangements can help maintain energy imports when conventional banking channels face restrictions.

12. Challenges for exporting countries

o Exporters may be reluctant to accumulate large holdings of local currencies if those funds cannot be easily used for trade, investment, or conversion into other assets.

Significance for India

· Improves energy security through access to an additional major crude supplier.

· Enhances bargaining power by increasing competition among oil exporters.

· Reduces import costs due to proximity and favourable credit arrangements.

· Supports rupee internationalisation if future oil trade is partly settled in Indian currency.

· Diversifies supply sources, lowering dependence on any single region or supplier.

Key Takeaway

Iran’s push for multi-currency oil settlements is part of a broader global trend toward more flexible and sanctions-resistant energy trade. If US sanctions on Iran ease, India could regain access to a strategically important source of crude oil while benefiting from shorter shipping routes, favourable payment terms, and greater flexibility in settlement mechanisms.

[ABS News Service/25.06.2026]

Iran’s central bank Governor Abdolnaser Hemmati has said the country would be free to receive payments for its oil exports in any currency of its choice, underlining Tehran’s intent to diversify beyond dollar-based transactions, Al Jazeera reported.

The remarks come at a time when hopes of a broader US-Iran understanding have revived discussions around sanctions relief, oil flows and regional trade.

According to a video message shared by Iran’s government information office, Hemmati said Iran would not be restricted to receiving oil payments in US dollars and could choose alternative currencies depending on its interests and trading arrangements.

He also indicated that Iran would have flexibility over how its oil exports are transported and how payments are settled.

The comments follow reports of recent negotiations between Iran and the United States, including discussions around the release of about $12 billion in Iranian assets and easing restrictions linked to Iran’s oil sector.

What it could mean for India’s oil imports

Any easing of sanctions on Iranian oil could reopen opportunities for India, which had once been among Tehran’s key crude buyers. Renewed access to Iranian crude could benefit India because of shorter shipping distances and historically favourable payment terms.

Iran had historically offered India credit periods of 60-90 days, compared with around 30 days typically extended by several other suppliers.

India resumed receiving Iranian oil earlier after a temporary easing of US restrictions helped address supply concerns.

Before sanctions disrupted trade in 2019, Iran was a significant supplier to India. At its peak, Iranian crude accounted for around 11.5 per cent of India’s total crude imports, according to Kpler data.

India, the world’s third-largest oil importer and consumer, had largely stopped purchases from Tehran following US pressure and sanctions.

Alternative currencies already shape India’s energy trade

Iran’s emphasis on currency flexibility also mirrors broader shifts already visible in global energy trade.

India has previously settled some Russian oil transactions using a combination of currencies, including rupees, dollars, dirhams, yuan and, in certain cases, roubles.

After sanctions and geopolitical disruptions affected traditional payment channels, Indian refiners increasingly adopted alternative settlement mechanisms to maintain energy flows. Reports in 2024 also indicated that Reliance Industries agreed to purchase Russian oil from Rosneft using rouble-based arrangements under a long-term agreement.

India’s experience shows that oil trade is increasingly adapting to sanctions and banking constraints through multi-currency settlement models rather than relying solely on the US dollar.

For India, settling trade in rupees helped maintain import continuity when conventional payment routes became difficult. For exporting countries, however, holding large balances in local currencies can present challenges if those funds cannot be easily redeployed.