Iran turns from dollar to euro in oil sales

http://business.timesonline.co.uk/article/0,,16849-2514985,00.html

Iran is selling more of its oil for payment in euros than dollars as it seeks to shift its foreign currency reserves away from the depreciating currency of its political enemy, the United States.

The world’s fourth-biggest oil exporter has inserted a clause in its oil contracts allowing it to request payment in alternative currencies.

Gholanhossein Nozari, the managing director of National Iranian Oil Company, said that 57 per cent of Iran’s income from oil exports was now received in euros.

The move reflects a political desire for less reliance on the dollar, as well as a need to avoid further depreciation in currency reserves. Iran’s dollar holdings are thought to have fallen from 40 per cent of currency reserves to just a third.

<snip>

Iran’s decision to switch currencies extends a trend among big oil exporters moving from the dollar as they seek protection from a continuing slide in the petrocurrency’s value. In October Russia said it would diversify its currency reserves into Japanese yen. Overall, Russia is believed to have let its dollar holdings slip and they are now equal with euros.

...more...

:scared: MKJ

Remember the US is Venezuela's TOP customers, if he demands to be paid in Euros, the US has to get Euros. Iran and Russia trade (Both Oil Exports and Imports) with Europe than with the US, so until the switch oil importers from Europe had to sell Euros for Dollars to buy the Oil, then Iran and Russia had to sell the Dollars for Euros to pay for their imports. The switch to the Euro cuts out the need and use of the Dollar.

Now most of these "Dollars" and "Euros" are NOT real Euros or Dollars but bank transaction occurring between banks. The real question is HOW much control of these electronic "Dollars" and "Euros" does the Federal Reserve have AND what affect (if any) will the switch have on the Dollars used elsewhere (Including the US). One groups say these are just pieces of fiction and say it will have no affect, the dollars being used will disappear on they own for all we are dealing with is what a transaction is measured in as opposed to actual use of real Dollars and Euros.

The other extreme sees this as a problem that can put downward pressure on the Dollar for Iran and Russia will no longer need Dollars to buy oil, thus less demand for Dollars which will drive the price down in relation to the Euro. This can escalate as people abandon the Dollar for the Euro and the Yen (and maybe even the Chinese Yuan, but the Yuan is tie din heavy with the Dollar).

I am in the middle, the "Dollars" and "Euros" used in most international transactions are used to set a value for the transaction NOT used directly to buy items (i.e. bank to bank transfers in Dollar and Euro Amounts no actual Dollars and Euros change hands). Thus this switch has little direct affect on Dollar and Euro Values to each other. On the other hand it has SOME EFFECT, just because people in Europe, Iran and Russia will be able to do transactions in Euros instead of Dollars. The real question is how far this will go?

This brings me back to Venezuela. The US imports its oil from Canada, Mexico and then Venezuela (They are others but minor compared to these big three and domestic production). If Venezuela switch's and gets away with it, then the downward pressure on the Dollar compared ot the Euro will be immense. Until then the downward pressure will be manageable for Canada and Mexico will NOT switch given how closely both countries economies are tied in with the US economy. If Venezuela switch and the US MUST sell declining value Dollars for increasing value Euros, then pressure will be on Mexico and Canada also to abandon the Dollar.

Anyway, Chavez will NOT make the switch until he feels secure that he can get away with it. Chavez knows the US will do everything Bush thinks he can gt away with (including an Invasion, even if troops are tied up in Iraq AND the attack is unpopular in the US). THus Chavez needs to improve his Military (More in terms of Fighting a popular war against occupying US Troops and Collaborators than in Stopping any US Invasion) and improve the conditions of his poor so that his restoration to power will have massive support including support for the guerrilla war he will have to fight. Chavez seems to be doing both, the real question is how far will the Dollar go before he switches and what will Bush do if Venezuela switches to the Euro.

only a rudimentary understanding of geopolitical economics.

I'm bookmarking this for future reference, you have really captured the current situation and projected some feasible hypotheticals.

As far back as four years ago, I was hearing of the folly of ignoring the impact of the rise of the Euro on the world economy. MKJ

I think the problem in a nutshell is that oil-procuding countries will keep fewer of their central banks' reserves in dollars, i.e., they'll sell the dollars on the open market. Oil-consuming countries will do the same thing. Huge amounts of dollars being dumped on the global economy will result in a precipitous decline in the dollar's demand, and hence its value. This will make it exceedingly difficult for the US to continue to finance its sovereign and trade debts, and it will have to pay out more of its receipts (taxes) on interest and principal payments.

You say: "If Venezuela switch and the US MUST sell declining value Dollars for increasing value Euros, then pressure will be on Mexico and Canada also to abandon the Dollar."

I have read the end-game is to dissolve U.S. sovereignty, and that an "administrative shadow government" is already being formed joining us with Mexico and Canada. Then we will have the "North American Union" (part of the New World Order) and the Amero.

I also read that the US disastrous performance in Iraq is deliberate to provide an excuse to dissolve our government and put us under control of a "global dictatorship".

that`s when the shit will hit the fan. everyone is hedging their bets right now. i think they are waiting for the new and improved senate and house in america

The Times
December 22, 2006

Iran turns from dollar to euro in oil sales
Carl Mortished, International Business Editor

Iran is selling more of its oil for payment in euros than dollars as it seeks to shift its foreign currency reserves away from the depreciating currency of its political enemy, the United States.

The world’s fourth-biggest oil exporter has inserted a clause in its oil contracts allowing it to request payment in alternative currencies.

Gholanhossein Nozari, the managing director of National Iranian Oil Company, said that 57 per cent of Iran’s income from oil exports was now received in euros.

The move reflects a political desire for less reliance on the dollar, as well as a need to avoid further depreciation in currency reserves. Iran’s dollar holdings are thought to have fallen from 40 per cent of currency reserves to just a third.

http://business.timesonline.co.uk/article/0,,16849-2514985,00.html

nt

and crashes, for there is nothing to back it up any more except empty promises. I thought one of the real reasons we invaded Iraq was because Sadaam was planning to sell his oil for euros rather than dollars. It will be interesting to see what Bush does now to Iran. (Or perhaps better to say "tries to do"-hope the Dems stand firm against allocating money for any more troops in the area-I fear the "surge" will be used in an attack on Iran)

The mighty Iranian oil bourse is finally upon us. *snicker*

:shrug:

The Circle of Oil will Exclude US

Russia and China:
http://www.chron.com/cs/CDA/ssistory.mpl/world/3310317

Iran and Iraq:
http://www.gnn.tv/headlines/3670/Iraq_Signs_Military_Pact_with_Iran


And here's where it comes full circle:

Venezuela enlists Iran to steer oil to China
By Andy Webb-Vidal in Caracas
Published: January 31 2005 03:00 | Last updated: January 31 2005 03:00

Venezuela has enrolled Iran to help it accelerate a strategy to steer its oil exports to China and away from its traditional market of the US.

A team of traders from Petróleos de Venezuela (PDVSA), the state-owned oil company, is to be trained in London by Iranian advisers in how to best place oil in Asian markets, according to industry sources.
http://news.ft.com/cms/s/3221ed52-732d-11d9-86a0-00000e2511c8.html


Guess the PNAC clan will get to pull out their BIG toys now, won't they?

God help us all.

Any wonder that the Bush clan bought the ranch in
Paraguay?
They are out of here, leaving the rest of us
to face the total collapse of the country as we know it.

BHN:scared:

THAT'S why we attacked Iraq.

the rumor is that OPEC has been pricing oil to reflect weakening dollar relative to Euro even if they haven't been pricing in Euros.

dollar is toast

BushCo has it all figured out, cuz we'll just merge the US with Canada and Mexico, get our oil domestically and sell it in Ameros! Plus, Bush plans to "win" in Iraq--and take all the oil!