A support vessel flying Iranian national flag sails alongside the oil tanker ‘Devon’ as it prepares to transport crude oil to export markets. (Getty)

September 28, 2020

Iran will allow holders of government sukuk, or Islamic bonds, to be repaid in crude oil exports, state-run Press TV reported, citing a finance ministry announcement.

Holders of sukuk due before May 2021 can apply to receive the equivalent of their bonds and their interest in crude cargoes, it said.

It’s unclear how the transactions would work — presumably, the bondholders could be given options on futures contracts, but the mechanics are not spelled out in the report.

Iran has considered a number of options to boost state revenue battered by the coronavirus crisis and U.S. sanctions. Earlier this year, it was planning to offer oil-backed securities to its citizens and to sell stakes in state companies on the local stock market.

Iran’s economy has been suffering since 2018, when the United States exited Tehran’s nuclear deal with six world powers and re-imposed sanctions, strangling Iran’s oil trade.

This would be the first time Iran has used oil to repay bonds issued in the local market, said Press TV.

Reuters

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.