Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

[plasticsundance]

Concerning Iran, recent articles have revealed active Pentagon planning for operations against its suspected nuclear facilities. While the publicly stated reasons for any such overt action will be premised as a consequence of Iran's nuclear ambitions, there are again unspoken macroeconomic drivers underlying the second stage of petrodollar warfare – Iran's upcoming oil bourse. (The word bourse refers to a stock exchange for securities trading, and is derived from the French stock exchange in Paris, the Federation Internationale des Bourses de Valeurs.)

In essence, Iran is about to commit a far greater "offense" than Saddam Hussein's conversion to the euro for Iraq's oil exports in the fall of 2000. Beginning in March 2006, the Tehran government has plans to begin competing with New York's NYMEX and London's IPE with respect to international oil trades – using a euro-based international oil-trading mechanism.<7> The proposed Iranian oil bourse signifies that without some sort of US intervention, the euro is going to establish a firm foothold in the international oil trade. Given U.S. debt levels and the stated neoconservative project of U.S. global domination, Tehran's objective constitutes an obvious encroachment on dollar supremacy in the crucial international oil market.

From the autumn of 2004 through August 2005, numerous leaks by concerned Pentagon employees have revealed that the neoconservatives in Washington are quietly – but actively – planning

Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

[muriel_volestrangler]

1. While William Clark does seem to have knowledge in this area

I can't work out if it's just his own opinion that the new bourse will set prices in euros, or if there's been any announcement of that from an Iranian official. Can anyone find anything from a straight news report (and this doesn't include the Communist Party of Australia's Guardian newspaper) saying euros will be used?

[BlueEyedSon]

3. Why would they trade in dollars?

[muriel_volestrangler]

4. Because a lot of world trade is still in dollars

or currencies that track it. For instance, although China, a big customer for Iranian oil, is now changing from fixing the yuan to the dollar, the weighting of the dollar in the 'basket of currencies' that it will track is though to be about 50% (http://www.thestandard.com.hk/stdn/std/Markets/GH05Ag05.html).

I can easily believe they would trade in euros; it's just that it never seems to get mentioned in actual press reports, rather than blogs which all seem to trace back to Mr. Clark. Here's a currency expert, who looks on it only as a possibility:

In 2000, Saddam Hussein decreed that Iraqi oil would be sold for euros. Two years later, Iran converted most of its currency reserves to euros in 2002-3 and still weighs options to price its oil revenues in euros.

http://www.forexnews.com/AI/default.asp?f=A20050801A.mgn

[welshTerrier2]

2. there's a GD-Politics discussion on this topic

it can be found here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x1993819