"Iran oil bourse:a
threat to the petrodollar?"
"Iran's decision to set up an oil and associated derivatives market next year has generated a great deal of interest.
This is primarily because of Iran's reported intention to invoice energy contracts in euros rather than dollars.
The contention that this could unseat the dollar's dominance as the de facto currency for oil transactions may be overstated, but this has not stopped many commentators from linking America's current political disquiet with Iran to the proposed Iranian Oil Bourse (IOB)."
Here is an article from
2004 setting out reasons why this is a real threat to the US.
"Getting a share of this economic free lunch has been one of the motivations, and perhaps the main motivation, behind setting up the euro2 . Were the euro to become a reserve currency equal to, or perhaps even instead of, the dollar, countries would reduce their dollar holdings while building up their euro savings. Another way of putting this would be to say that Eurozone countries would be able to reduce their subsidy to American consumption and would find that other countries were now subsidising Eurozone consumption instead."
"Semi-official confirmation that petro-currency rivalry was at the heart of the split between France and Germany, on the one hand, and the US, on the other, was provided by Howard Fineman, the chief political correspondent for Newsweek, in an article he wrote in April 2003, in the aftermath of the war. The Europeans and Americans were then arguing over whether the UN's oil-for-food programme in Iraq should remain in place or not. Using the term 'clash of civilisations' to describe the divide which was developing, Fineman explained that the disagreement had little to do with the French calls for the search for weapons of mass destruction to resume and for sanctions to remain in place until the search was complete. Instead, Fineman said, it was mainly about the dollar vs the euro. Citing White House officials and a presidential aide, he explained that the dispute between the two continents was really about 'who gets to sell - and buy - Iraqi oil, and what form of currency will be used to denominate the value of the sales. That decision, in turn, will help decide who controls Iraq, which, in turn, will represent yet another skirmish in a growing global economic conflict. We want a secular, American-influenced pan-ethnic entity of some kind to control the massive oil fields (Iraq's vast but only real source of wealth). We want that entity to be permitted to sell the oil to whomever it wants, denominated in dollars.' Fineman concluded his article by confidently predicting that future Iraqi oil sales would be switched back to dollars1 ."
Who comes next, one guess.
"America's willingness to use violence to defend its economic interests does not seem to have reduced the number of oil exporters considering switching to the euro as they recognise that their use of the dollar enables the US to build up its military strength. "
"In a further development, in June 2004, Iran announced that it had plans to establish an oil-trading market for Middle Eastern and OPEC producers which could threaten the dominance of London's International Petroleum Exchange and New York's Nymex20 . Such a move could help remove some of the technical difficulties that exist with a switch away from dollar-denomination of oil sales.
the US has refused to get involved in direct talks with the Iranian government which it views as 'evil'.
It is therefore not surprising to find that, just as with Iraq, the European Union and the US are dealing with Iran in very different ways. While the EU has been holding trade negotiations with Iran21 and involved in dialogue about its nuclear programme, the US has refused to get involved in direct talks with the Iranian government which it views as 'evil'.
nice cheery finish;
"The dollar, though, is no longer a stable, reliable currency: the IMF has warned that the US trade deficit is so bad that its currency could collapse at any time32 . Will we really have to wait for a full-blown dollar crisis before a public debate about creating a just and sustainable trading system can begin?"
but i was reading an article from the ( I think) the New American Institute or some such body lile that which implied that under no circumstances should the US allow gulf states to move away from the dollor being the main currency with regard to dealing in oil,gas and minerals etc.
