Get ready for gas prices to shoot up: Iran dumps US dollar for oil trades...

[TheInfamous]

Iran dumps U.S. dollar for oil trades - CNN.com

TEHRAN, Iran (AP) -- Iran, OPEC's second-largest producer, has stopped conducting oil transactions in U.S. dollars, a top Oil Ministry official said Wednesday, in a concerted attempt to reduce reliance on Washington at a time of tension over Tehran's nuclear program and suspected involvement in Iraq.

Iran has dramatically reduced dependence on the dollar over the past year in the face of increasing U.S. pressure on its financial system and the fall in the value of the American currency.

Oil is priced in dollars on the world market, and the currency's depreciation has concerned producers because it has contributed to rising crude prices and eroded the value of their dollar reserves.

"The dollar has totally been removed from Iran's oil transactions," Oil Ministry official Hojjatollah Ghanimifard told state-run television Wednesday. "We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies."

Iranian President Mahmoud Ahmadinejad called the depreciating dollar a "worthless piece of paper" at a rare summit last year in Saudi Arabia attended by state leaders from OPEC countries.

Iran put pressure on other OPEC countries at the meeting to price oil in a basket of currencies, but it has not been able to generate support from fellow members -- many of whom, including Saudi Arabia, are staunch U.S. allies.

Iran has a tense relationship with the U.S., which has accused Tehran of using its nuclear program as a cover for weapons development and providing support to Shiite militants in Iraq that are killing American troops. Iran has denied the allegations.

Iranian oil officials have said previously that they were shifting oil sales out of the dollar into other currencies, but Ghanimifard indicated Wednesday that all of Iran's oil transactions were now conducted in either the euro or yen.

"In Europe, Iran's oil is sold in euros, but both euros and yen are paid for Iranian crude in Asia," said Ghanimifard.

Iran's central bank has also been reducing its foreign reserves denominated in dollars, motivated by the falling value of the greenback and U.S. attempts to make it difficult for Iran to conduct dollar transactions.

U.S. banks are prohibited from conducting business directly with Iran, and many European banks have curbed their dealings with the country over the past year under pressure from Washington.

However, the U.S. has been wary of targeting Iran's oil industry directly, apparently worried that such a move could drive up crude prices that are already at record levels.

Iranian analysts say Tehran can withstand U.S. pressure as long as it can continue its oil and gas sales, which constitute most of the country's $80 billion in exports.

[TheInfamous]

from another forum:

looks like the US will get an Iran War this year. Iran chose the best time from their perspective because the US military is over-streched and strained which means it's vulnerable. And yet if the US don't strike soon they might lose A LOT! Bush might have succeeded to ruin the country after all. NO ONE in the international community will support air strikes against Iran over that nuclear weapons issue the US is trying to push (reminds me of that story of the little boy crying "wolf")

Watch dollar go into the dumpster...

oh man.... it's begun


The us has been able to print gold for nothing. The games is quickly coming to an end.

IF china dumps the dollar too.........WOW

[shah269]

Well.....what can i say?
Our ship is on the rocks and the captain is still insisting we push the engines and stay the course.
And well you know what they say? The captain goes down with the ship......but maybe we can maybe make him walk the plank?

[TheInfamous]

if this affects our dollar too much, it's going to have a domino effect on our economy. Venezuela will be next to switch, followed by the rest of OPEC.

[shah269]

Do you remember the words
"We will be out in 6 months"
of
"The war will pay for it self!"
and
"We will be greeted as liberators!"
Have you seen how much this war has cost us?
And who we are borrowing that money from?
We are like Paris Hilton with some one else's credit card!
And just as England collapsed I fear we may also fall.

[Gaolee]

I have been wondering how long before the petrodollars became petroeuros. It is oil priced in dollars that has allowed the dollar to stay in demand, in spite of our generations long import binge. The dollar has a long way to fall now, because if nobody wants it, the price will go down, just like anything else.

The great American Nero strikes again.

[jerome_oneil]

The world will be conducting it's business in Euros and whatever the Chinese use for money in a decade. Probably less.

Another lasting legacy of the Bush administration.

[gospeed81]

I've had the sneaking suspicion for about two years now that the dollar is no longer the world currency.

As long as it still gets me ten pesos though, my retirement plan is A O K

[shah269]

And will we able to hold him accountable for his mismanagement of the war and the economy?
What's the punishment for killing America?

[baldheadeddork]

I've talked about the danger of OPEC switching to euros for a few years now, but I think you guys are reading way too much into this.

For starters, Iran said they were going to do this two years ago and they tried to set up an exchange to trade oil in euros. None of the other oil producing companies joined them then, and I don't think that will change in the immediate future. We still have a lot of diplomatic leverage with most of the other oil producing companies and there is a real danger of setting off a global financial collapse if they do something like this, which gives us a lot more countries on our side.

You're also totally misunderstanding Iran's holding of dollars. They don't, at least not through direct trade. We don't buy Iranian oil. When Iran prices sells oil in dollars, that price in dollars is just the conversion point for whatever currency the customer is using.

I think this is just the latest round of tit-tat between Iran and the US. Bush has jacked up the military rhetoric lately, and this is one of the ways Iran is striking back.

[shah269]

Hay if you could simply make more cash by changing what's infront of a number would you? God knows I would! I mean look we've fallen %30 over the past two years.
What if you lost %30 of your wealth? Would you maybe do something to stop it?
And what if odds were you were going to loose another %30 on top of that over the next 4 years. Hay we will be in Iraq for a long long time!
I don't blame the guy, I would do the same.
Hay to quote the gopers "It's buisness"
And to quote an Iranian girl I once knew "I have him by the balls, the more he cries the harder i twits!"

[Gaolee]

Originally Posted by baldheadeddork

I've talked about the danger of OPEC switching to euros for a few years now, but I think you guys are reading way too much into this.

We are reading too much into it? Yes and no. The dollar's demise starts somewhere, and here it is. It was going to happen somewhere, somehow. Tit for tat started wars, felled empires, and all kinds of other things. Keeping hormonal responses in check isn't the strong suit for either dumb'ya or Ahamanutjobidad. Keeping hormonal responses in check is the key to diplomatic and economic success.

dumb'ya is the great American Nero, presiding over the dismantling of our national reputation and strength. This is only one aspect, but it is both symbolic and potentially very damaging.

[Trash]

If this does start to spread to other OPEC countries and the US Dollar is no longer the largest held "Reserve Currency" in the world, isn't it estimated that it would take about a 30% reduction in value? Making all our imports (especially oil) 30% more expensive?