Sidestepping U.S. imposed sanctions on Iran, India is planning to pay for Iranian oil in gold, with China considering following the move.
India, which buys 22 percent of Iran's oil exports, has reportedly agreed to pay in gold for oil, thus avoiding U.S. imposed sanctions on dealing with the Islamic Republic. According to Iranwpd, China, which accounts for 13 percent of Iran's oil exports, may follow India's lead. India and China are both opposed to sanctions against Iran.
On Monday the 27 nations of the European Union confirmed they will impose sanctions against Iran commencing on July 1. The BBC reported that EU sanctions will ban all new oil contracts with Iran from that date, in addition to freezing the assets of Iran's central bank in the EU.
The EU ban was originally blocked by Greece which is dependent on Iranian oil imports as Iran allows the debt ridden nation to purchase on credit. The EU assured Greece that an alternative supplier would be found, though no alternate supplier has yet been announced. The ban will inevitably lead to higher oil prices in Greece, thus further fuelling the country's recession.
Reacting to U.S. and EU sanctions, a political scientist in Tehran said that sanctions will hit ordinary Iranians "who will be worse affected by the sanctions than the government" Times Live reported. With the fall in value of the rial since U.S. sanctions were announced at the end of December, Iranian people are already suffering from high inflation.
With China and India planning to remain as Iranian consumers, there are predictions that the EU ban on oil imports will backfire and affect the Mediterranean countries more than Iran. Meanwhile the price of oil has risen in the wake of further sanctions.