Shell Can't Pay Billion Dollar Oil Bill To Iran

Bertel Schmitt
by Bertel Schmitt

In the nice problem to have department, Shell is doing its very best (or so they say) to settle a $1 billion bill for about four large tanker loads of Iranian crude. The problem: Sanctions make payments to Iran hard if not impossible.

“Shell is working hard to figure out a way to pay. It’s very sensitive and very difficult. They want to stay on good terms with Iran, while abiding by sanctions,” a source told Reuters.

Shell was one of Iran’s top clients, along with France’s Total and Turkey’s Tupras. After sanctions on Iranian oil were declared, companies have until July 1 to take last deliveries of oil. Payment however is a whole different matter.

“It is now nearly impossible to use the banking system,” an oilman told Reuters. Payments had been hard for a while. Dubai banks used to be able to facilitate payment in and out of Iran, but this has stopped following pressure from Washington.

Isn’t this a problem we all would like to have?

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments
Join the conversation
4 of 9 comments
  • 28-Cars-Later 28-Cars-Later on Mar 25, 2012

    Man wouldn't you hate to get collection calls from Iran!

  • Andy D Andy D on Mar 25, 2012

    Send me the money. I know an Iranian. We'll go to 'Vegas.

  • Musiccitymafia Musiccitymafia on Mar 26, 2012

    Wonder what the payment terms are. Compounding interest rates would balloon up this debt when it does become legal to pay ... unless they're specifically excluded due to force majeure or something like that.

  • Joe K Joe K on Mar 28, 2012

    No one really follows the news... The cnetral clearing house, the master routing for all financial transactions in the world are no longer processing money to or from Iran. Mailing them a check (imagine wiriting it) would not be processed. It doesnt matter who makes what oil where or who uses it, oil prices are from a worldwide unitary market. Speculators drive the price up or down as supply and demand has very little effect on prices anymore in the world market (they do locally ie a refinery goes offline). Must be a hell of a problem for the accounting office. Imagine a billion dollar check not being cashed on the books.

Next