Will the world find a
replacement for oil-backed dollars?
Publico, Spain
Petrodollars to Petro-What?
"The recent opening of the Iran Petroleum Exchange - which excludes use of the U.S. currency - coincided with increasing tension between Tehran and Washington. ... The conflict with Iran has nothing to do with its non-existent nuclear weapons or its anti-dollar petroleum market. As in the cases of Iraq and Libya, it is for the purpose of seizing a strategic region soaked in black gold."
Iranian President Ahmadinejad: Is Tehran's brinksmanship with Washington and the West over nuclear weapons really about the U.S. wanting to maintain the strength of the fast-diminishing dollar?
When Bush invaded Iraq in
2003, some analysts cited Saddam Hussein's decision to abandon the dollar for
the euro in the oil trade as the main reason. Two months after the occupation,
the greenback returned to the Iraq market. The same theory asserts that the NATO
attack on Libya was to prevent Qaddafi, in the face of a declining
dollar, from filling the Libyan Central Bank with gold and offering a
gold-backed dinar as the sole currency for Africa. The recent opening of the
Iranian Petroleum Exchange - which excludes use of the U.S. currency - has also
coincided with increased tension between Tehran and Washington. This so-called
“true Iranian bomb” is designed to compete with London's International
Petroleum Exchange and New York Mercantile Exchange, both of which depend
on U.S. power and its currency.
Posted by WORLDMEETS.US
The Iranians hope that the Europeans,
Chinese, Indians and Arabs, which are fleeing a declining U.S. currency, choose
to use their exchange. Nevertheless,
this is about selling oil in other currencies while the market price remains denominated in dollars - which are backed by the political and military
power of the United States. Therefore, a “petro-yuan” or a “petro-euro” is
still a long way off. In addition, Iran is still laboring under stiff economic sanctions,
the minuscule size of its oil exports (about $2. 6 million barrels a day) and
the fact that China, its largest customer, expects to pay in "hundred
dollar bills" rather than in yuan, thereby neutralizing Iranian plans. Also
in India, another “emerging” client, Tehran has turned off the spigot over non-payment.
The dollar-oil tandem emerged
out of the 1973 Arab-Israeli War. The 400 percent price increase (real or
manipulated) of this energy source tempted the United States, with the
complicity of Saudi Arabia, to force the world's central banks to dispose of billions
of greenbacks to buy oil. Thus ended the dollar crisis, establishing its
control over market movements of the king of fuel.
[Editor's Note: The 1974 oil crisis,
triggered by U.S. support for Israel and President Richard Nixon's subsequent decision to take the U.S. off the
gold-standard, had a profound impact on the international system. The rise in
world energy prices and weakened dollar generated unprecedented current account
surpluses for oil-exporting nations, much of which ended up being deposited in
U.S. banks. Through a system that came to be known as "petrodollar
recycling" many of these funds were, in turn, lent to oil-importing
developing countries to help them finance their energy imports.]
The conflict with Iran has
nothing to do with its non-existent nuclear weapons or its anti-dollar petroleum
market. As in the cases of Iraq and Libya, it is for the purpose of seizing a
strategic region soaked with black gold.
