China blocked $18bn of Iran’s petrodollars

Press TV- A report by a leading Iranian newspaper says the country has at least $18 billion still blocked in China in what appears to be a result of complications related to previous sales of oil to Beijing during the years of sanctions. 

The report by the Persian-language newspaper Sharq said the amount had been announced by Ali Kardor, the managing director of the National Iranian Oil Company (NIOC).

It added that the amount had been accumulated in China after the government of Iran’s former president Mahmoud Ahmadinejad (2005-2013) sealed a contract with Beijing in 2008 by means of which the money for oil that Iran sold to the country would be used as “bail” for exports of Chinese products to the Islamic Republic.

The scheme apparently was devised after the sanctions made it impossible for Iran to transfer the money for the oil it sold to other countries to its own accounts.

Nevertheless, Sharq said in its report that it was still not clear how much of Iranian petrodollars China was exactly still keeping.

Previous reports said China was planning to provide Iran with major loans from the country’s oil money it was holding for to fund Iranian petrochemical projects.

Officials in Tehran said early last year that “red-tape” was delaying the plan.

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Sharq further highlighted contradictions among officials over the exact figure and estimations that had so far been provided varied from $22 billion to $25 billion and even $47 billion.

“About $18 billion were deposited in Chinese banks by the previous government from oil sales to the country,” Kardor was quoted as saying by the newspaper.  “Accordingly, China was supposed to provide three times the amount that Iran had deposited in its banks in loans to Iranian companies,” he added, emphasizing that it was still not clear how this scheme had proceeded.

The NIOC chief said Iran would be unable to receive the amount that it had deposited at Chinese banks until the period of the contract that Ahmadinejad’s government had signed with Beijing was over.

Nevertheless, he emphasized that a legal procedure to return the amount should be created between Iran and China once the contract period was over.