Iranian Oil Bourse Set To Trade In Euros
Saddam Hussein decided the Euro was a better currency than the US Dollar for selling Iraq's oil, but then Iraq was invaded. Within three months of the start of the War On Iraq, in March, 2003, Iraq was back selling its oil in American dollars.
If OPEC backs the move by Iran and Venezuela to do away with the US Dollar, it will be grim news indeed for the American economy, and will add to the momentum that is already peeling away the remaining value of the US Dollar as a stable world currency.
From PressTV :
Organization of Petroleum Exporting Countries plans to discuss a proposal by Iran and Venezuela to price oil in non-dollar currencies.
Finance minister of the group, which supplies 40 percent of the global crude demand, will meet to study the proposal, the organization's President Chakib Khelil said.
Khalil, however, did not say when the ministers are scheduled to discuss the proposal amid the ongoing depreciation of the dollar.
The idea floated by Tehran and Caracas since the dwindling dollar fallen 16.2 percent against a basket of major currencies since two years ago.
Iran, the OPEC's second largest exporter, has already cut all of its ties with the greenback with respect to oil transactions.
Qatari Prime Minister Sheikh Hamad bin Jassim Al Thani had also said earlier that amid concerns about the weakness of the US dollar in recent months, the oil-rich Persian Gulf littoral state would shift Qatari riyal from the US currency over the next six months.
"The dollar lost a lot of value and energy worldwide is priced in the dollar, so all the producers are affected by the development on the dollar. This is a cycle so we have to live with it," Abdullah Bin Hamad Al-Attiyah said.
The UAE is also likely to follow the lead, as Kuwait did last May.
From the Associated Press :
Iran has already registered for another oil bourse, in which it has said it hopes to trade oil in Euros instead of dollars, to reduce any American influence over the Islamic Republic's economy. A bourse official, Mahdi Karbasian, told the IRNA official news agency that such an oil market would begin operating within the next year.
While most oil markets are traded in U.S. dollars, Iran first floated the idea of trading oil in Euros in the early 2000s during the tenure of reformist president Mohammad Khatami.
It gained new life after the nationalist Mahmoud Ahmadinejad was elected in 2005.
As the fourth largest oil producer in the world, Iran has a measure of influence over international oil markets. The country ranks second for output among OPEC Countries, and controls about 5 percent of the global oil supply.
Tehran also partially controls the Persian Gulf's Strait of Hormuz, through which much of the world's oil supply must pass. Iran has sought to wield its oil resources as a bargaining tool in its ongoing standoff with the West over its nuclear program.
Expect BushCo. to retaliate.