Iran is using a barter-style trade arrangement with China to obtain medicines, vehicles, communications equipment and other goods in exchange for oil.
Iran has adopted a barter-style trading mechanism with China to continue selling oil while reducing its reliance on the international banking system and limiting exposure to U.S. sanctions, according to people familiar with the trade and two senior Iranian sources.
Under the reported arrangement, Iran is receiving various goods from China in exchange for Iranian oil. The items include medicines, vehicles, communications equipment and other products, according to the sources cited by a foreign news agency.
The mechanism allows trade to take place without direct financial transactions through conventional banking channels. Instead, credit is reportedly provided against Iranian oil for the purchase of goods from China, while companies manufacturing those goods do not directly handle financial transactions with Iran.
The arrangement is aimed at navigating U.S. sanctions and restrictions imposed through the international financial system that affect trade and financial dealings with Iran.
According to the report, Iran has also benefited from similar trading arrangements in agreements involving the supply of air defense equipment over the past year. However, the report did not provide further details about those transactions.
Iran is reportedly using other mechanisms alongside barter-style trade to obtain goods and services from Chinese companies without transactions passing through the international banking system.
The sources did not provide additional details about the alleged transactions, and the news agency said it could not independently verify the reported arrangements.
China’s Foreign Ministry, responding to questions about the reported barter trade, said it was not aware of the situation described. However, Beijing reiterated its opposition to unilateral sanctions.
The Iranian missions to the United Nations in New York and Geneva had not responded to requests for comment from the news agency at the time of the report.
The reported arrangement highlights the alternative trade mechanisms Iran is using as it seeks to maintain commercial links with China while dealing with restrictions affecting its access to conventional international financial channels.
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