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."


By Nazanin Amirian



Translated By Florizul Acosta-Perez



Spain - Publico - Original Article (Spanish)

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?


AL-ALAM TV, IRAN: Iran Revolutionary Guard Aerospace Force Commander Amir Ali Hajizadeh: 'We Can Strike Tel Aviv and the U.S. Navy', June, 2011, 00:08:15RealVideo

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.   



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.


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[Posted by WORLDMEETS.US Aug. 6, 5:55pm]


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