Iranian oil no longer available for U.S. dollars
Iran has decided to abandon oil export settlements in U.S. dollars.
Our current policy is to sell crude oil for any currency but U.S. dollars, Iran’s Oil Minister Gholam Hossein Nozari said in a statement, adding that all settlements in the U.S. currency had been ruled out.
Iran has been considering this move for a long time, consistently limiting the inflow of petrodollars in the past two years. Iranian officials claim that the reason behind their decision is the devaluation of the dollar. An Iranian source said that the dollar’s decline was greatly harming the oil exporting nations’ economies and that they had no more trust in the U.S. currency.
… Incidentally, on November 30, Gazprom’s Deputy CEO Alexander Medvedev said in New York that the Russian gas monopoly was considering a possibility of selling gas for rubles instead of dollars or euros. The gas giant was compelled to change its currency policy by the current situation on the global financial markets. Although he did not specify the date, Andrei Kruglov, head of Gazprom’s Finance and Economics Department, said the decision would be made soon enough.
… The U.S. dollar has certainly lost much of its attractiveness worldwide, unlike the euro which is gaining popularity, even if not in all countries.
… Other monetary units are being added to the pool of the main reserve currencies. The Gulf Cooperation Council (GCC), which includes the key Middle East oil and gas exporters, has said it was planning to set up a single regional currency, the Gulf Dinar, which would be put in circulation in three years and would be as important as the dollar and the euro. The GCC includes the United Arab Emirates, Saudi Arabia, Bahrain, Kuwait, Qatar and Oman.
… Xu Jian, a vice director of the People’s Bank of China, said last week that the dollar was “losing its status as the world currency,” adding that it was likely to continue weakening in 2008 due to the growing U.S. trade deficit.
- Dr Igor Tomberg, economist, senior research associate at the Energy Research Center of the Russian Academy of Sciences’ Institute of World Economy and International Relations. Russian News and Information Agency, 11/ 12/ 2007: link.
Iran Drops Dollar From Oil Deals
Major crude producer Iran has completely stopped carrying out its oil transactions in dollars, Oil Minister Gholam Hossein Nozari said on Saturday, labelling the greenback an “unreliable” currency.
… Nozari did not specify in which currencies Iran was now being paid. In the past, officials have said most oil income was in euros, with a significant percentage in yen.
Japan, which purchases 20 percent of Iran’s crude oil, has recently agreed to pay for the crude oil in yen, officials have said. The UAE dirham has also been mooted as a possible payment currency.
… The United States has in recent months successfully encouraged major European and Asian banks to cut their dealings with Iran in a bid to make the Islamic republic give way on its controversial nuclear programme.
AFP, 11 December, 2007: link.
Iran stops selling oil in US dollars
… OPEC giant Iran has completely stopped selling any of its oil for US dollars.
… Iran says the weak US currency is eroding its purchasing power. At the latest November summit of OPEC, Iran suggested oil should be sold in a basket of currencies rather than dollars, but failed to win over other members except Venezuela.
- South African Broadcasting Corporation: December 08, 2007, 13:45: link.
Iran ‘euro-based’ oil bourse underway
An official said that the managing director of Iran’s first petroleum exchange “Iran Oil Bourse” is expected to be appointed soon, bringing the oil-rich nation a step closer to opening its first ‘oil bourse’. Majid Shayesteh, managing director of Kish Free Trade Zone Organization, said that President Mahmud Ahmadinejad has directed Iran’s ministers of oil, economic affairs and finance to appoint the board of directors of the oil exchange and its managing director. He did not specify when exactly the exchange would open.
He also said the building which will house Iran’s first oil exchange has been constructed on the Persian Gulf island of Kish and that the required technical equipment has been installed.
Shayesteh added that three major organizations are involved in the groundbreaking project, saying that coordinating efforts between the various groups initially delayed the project.
According to the official, the articles of association for the oil exchange have since been approved. Last month, a separate official announced that the petroleum exchange would begin operation “in the near future.”
Mahmud Salahi, secretary of the High Council for Free Trade and Industrial Zones, had said that Iran decided to establish the euro-based oil exchange on Kish because “there was no such oil trading body in the region.” The oil exchange will transact petroleum, petrochemicals and gas in various non-dollar currencies, primarily the euro. It would also establish a euro-based pricing mechanism for oil trading, or ‘oil marker’ as it is commonly called by traders.
Oil Minister Kazem Vaziri Hamaneh said earlier that a stock market for trade in shares of oil companies will be established in Iran’s southern of Kish in the near future. While touring of a local gas transfer operation, the minister said the stock market will be set up in cooperation with the oil and finance ministries.
Last month, after a year of speculation, Iran changed its oil bourse from petrodollars to petroeuros.
- Persian Journal: Mar 11, 2007: link.
Iran turns from dollar to euro in oil sales
The world’s fourth-biggest oil exporter has inserted a clause in its oil contracts allowing it to request payment in alternative currencies.
… Iran announced plans in 2004 to develop an Iranian oil bourse, a commodity exchange that would become a Middle Eastern rival to the major exchanges in New York, London and Singapore, which set benchmark oil prices.
The Iranian bourse would also challenge the petrodollar by setting oil prices in euros. However, there has been little progress in establishing the bourse, which failed to launch as planned last March.
… The fall in the dollar against major currencies has had a dramatic impact on the revenues of oil exporters and has exacerbated the rumbling anti- American feeling in the Gulf.
Although Gulf Arab states are predominantly dollar export earners, they mainly purchase in euros and yen, buying food, consumer goods and manufactured products from Europe and the Far East.
In March the United Arab Emirates said that it would switch 10 per cent of its currency reserves from dollars to euros, a decision that closely followed the attempt by the US Congress to block the acquisition by Dubai Ports World of a number of ports in the United States.
Times Online, December 22, 2006: link.
Iran to replace dollar with euro
Iran also indicated that it will calculate its budget revenues in euros
The Iranian central bank is to convert the state’s foreign dollar assets into euros and use the euro for foreign transactions.
“The government has ordered the central bank to replace the dollar with the euro to limit the problems of the executive organs in commercial transactions,” Gholam Hossein Elham, a government spokesman, said on Monday.
“We will also employ this change for Iranian assets [in dollars] held abroad.”
Elham said that Iran’s budget would in future be calculated in euros.
“Until now the budget has been calculated according to revenues in dollars but this calculation will now change,” he said.
- Aljazeera, December 18, 2006: link.
The Emerging Euro-denominated International Oil Marker
In 2005-2006, The Tehran government has a developed a plan to begin competing with New York’s NYMEX and London’s IPE with respect to international oil trades - using a euro-denominated international oil-trading mechanism. This means that without some form 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 for U.S. global domination, Tehran’s objective constitutes an obvious encroachment on U.S. dollar supremacy in the international oil market
… ‘Operation Iraqi Freedom’ was a war designed to install a pro-U.S. puppet in Iraq, establish multiple U.S military bases before the onset of Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC momentum towards the euro as an alternative oil transaction currency.
… [A] Financial Times article dated June 5th, 2003, … confirmed Iraqi oil sales returning to the international markets were once again denominated in US dollars, not euros. Not surprisingly, this detail was never mentioned in the five US major media conglomerates who appear to censor this type of information ….
“The tender, for which bids are due by June 10, switches the transaction back to dollars — the international currency of oil sales - despite the greenback’s recent fall in value. Saddam Hussein in 2000 insisted Iraq’s oil be sold for euros, a political move, but one that improved Iraq’s recent earnings thanks to the rise in the value of the euro against the dollar.”
… To date, one of the more difficult technical obstacles concerning a euro-based oil transaction trading system is the lack of a euro-denominated oil pricing standard, or oil ‘marker’ as it is referred to in the industry. The three current oil markers are U.S. dollar denominated, which include the West Texas Intermediate crude (WTI), Norway Brent crude, and the UAE Dubai crude. However, since the spring of 2003, Iran has required payments in the euro currency for its European and Asian/ACU exports - although the oil pricing for trades are still denominated in the dollar.
Therefore, a potentially significant news development was reported in June 2004 announcing Iran’s intentions to create of an Iranian 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.) This announcement portended competition would arise between the Iranian oil bourse and London’s International Petroleum Exchange (IPE), as well as the New York Mercantile Exchange (NYMEX). It should be noted that both the IPE and NYMEX are owned by U.S. corporations.
The macroeconomic implications of a successful Iranian Bourse are noteworthy. Considering that Iran has switched to the euro for its oil payments from E.U. and ACU customers, it would be logical to assume the proposed Iranian Bourse will usher in a fourth crude oil marker – denominated in the euro currency.
The IPE, bought in 2001 by a consortium that includes BP, Goldman Sachs and Morgan Stanley, was unwilling to discuss the Iranian move yesterday. “We would not have any comment to make on it at this stage,” said an IPE spokeswoman. ”
… Additionally … Saudi investors may be interested in participating in the Iranian oil exchange market, further illustrating why petrodollar hegemony is becoming unsustainable.
“…Along with several other members of OPEC, Iranian oil officials believe crude trading on the New York Mercantile Exchange and the IPE is controlled by the oil majors and big financial companies, who benefit from market volatility.”
… A successful Iranian bourse would solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar’s hegemonic status as the monopoly oil currency. Therefore, a graduated approach is needed to avoid precipitous U.S. economic dislocations. Multilateral compromise with the EU and OPEC regarding oil currency is certainly preferable to an ‘Operation Iranian Freedom,’ or perhaps an attempted CIA-sponsored repeat of the 1953 Iranian coup – operation “Ajax” part II.
- William Clark @ Global Research, 27 October 2004: link.
Wikipedia: Petroeuro.
Over at Play This Thing!, game commentator the99th has published some highlights from the Games for Change 2008 Conference.
“What Iran plans to do in the long run is quite daring: to confront head-on Anglo-American energy/corporate banking domination of the international oil trade. “
Iran plays a strong hand in the global petroleum market:
“A huge offshore oil discovery could raise Brazil’s petroleum reserves by a whopping 40 percent and boost this country into the ranks of the world’s major exporters, officials said.”
… Ecuador joined OPEC in 1972 but left 20 years later, mainly due to not agreeing with the oil cartel’s quota requirement.
The American-dominated Coalition Provisional Authority could well prove to be the most corrupt administration in history, almost certainly surpassing the widespread fraud of the much-maligned UN Oil for Food Program. At least $20 billion that belonged to the Iraqi people has been wasted, together with hundreds of millions of U.S. taxpayer dollars. Exactly how many billions of additional dollars were squandered, stolen, given away, or simply lost will never be known because the deliberate decision by the CPA not to meter oil exports means that no one will ever know how much revenue was generated during 2003 and 2004. 
SourceWatch casts a critical eye upon CPA:
[W]hat did the USA want Iraq to do with Iraq’s oil? The answer will surprise many of you: and it is uglier, more twisted, devilish and devious than anything imagined by the most conspiracy-addicted blogger. The answer can be found in a 323-page plan for Iraq’s oil secretly drafted by the State Department. Our team got a hold of a copy; how, doesn’t matter. The key thing is what’s inside this thick Bush diktat: a directive to Iraqis to maintain a state oil company that will “enhance its relationship with 
Enhance its relationship with OPEC??? How strange: the government of the United States ordering Iraq to support the very OPEC oil cartel which is strangling our nation with outrageously high prices for crude.