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. 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.
If the current administration is looking for an excuse to invade Iran, this may just be it.
Thanks Chris Vallee.
“This may just be it”…again. You may remember a nation called Iraq that did the same.
They stop taking our money, and that’s a reason to invade them…
That makes allota sense…
Bush’s mini-me, and just as bright.
Ahmadinejad is just screwing up the price of Iran’s oil for the sake of making a political statement.
Iran is the only country that doesn’t use Dollars, which means that all oil transactions to and from Iran has to be converted from Dollars to Euros and back again. Why? Because everyone else still works in dollars! Iran only produces crude oil, no refined products whatsoever (they can build a nuclear reactor, but not one single refinery!!?)
So, a company -say Exxon- has to take their dollars and convert them to Euros to buy Iranin oil.
Exxon has to get a bank involved to do the exchange, you can’t wave a magic wand to make Euros from Dollars. The Euros themselves have to be purchased. Of course, this costs money. Since crude oil is a world commodity, Exxon can shop around for the cheapest price.
On the world market, this means that Iran either has to sell their oil for less per barrel to compensate for the cost of currency conversion, or sell less oil because it is more expensive than everyone else’s oil.
So all Ahmadinejad the Idiot accomplished was to reduce Iran’s profit! Does this make any sense to anyone? Iran has plenty of domestic issues, most of then related to not having enough money. So he decides that less money is better?
#1 and #2
More important is that the only thing keeping the dollar from total collapse is that oil is traded in them…
And, after we’re through plundering Iraq’s oil reserves, the U.S.Government-Haliburton Oil Road Show’s next stop is Iran 2009…and we only take Visa, no Iranian Rials!
Like it or not this is as much an attack on the US as flying airplanes into buildings and the long term effects could be worse.
Nuke’em, we’re going to have to sooner or later anyway.
Why oh why must we depend so much on oil? What’s it going to take to move us away from it? I can barely afford to fill up my tank with regular and now this? If companies like Exxon buy oil from Iran then they’re going to lose money by having to convert their $$ to Euros. They’ll pass that cost on to us. I highly doubt Iran would be in a position to simply lower their price in order to alleviate the cost their customers will incur by having to switch currencies. All this and Hurricane season hasn’t even started yet.
Come on US, get off your f’ing ass and do something about electric cars already. Build Nuclear power plants and other means to generate electricity and dump this dependency on oil. Or at least on foreign OPEC oil. These 4th century bullies will keep f’ing with us as long as we keep depending on it. I hate to say it but Uncle Sam is the biggest crack head in the world right about now.
^^ Build Nuclear power plants
Yes. We invent nuclear power and yet we decide to not build nuclear power plants … brilliant.
And add a special gas guzzler tax. Lincoln Navigators and other behemoths shouldn’t be wasting our fuel.
Well, “Bush Dollars” soon will be worthelss !!! After 8 years of Repuke PLUNDERING, the Gov’t is bankrupt, and the Nation head for a Depression (A word the Repukes will never utter !) !!! Soon, it might take a wheelbarrow of “Bush Dollars” to buy a loaf of bread, like with Weimar Republic !!! We saw the story about “Bush-Villes”, like the “Hoover Villes” of the 1930’s Depression Era !!! The Repukes promised to UNDO THE NEW DEAL, and they are doing it !!! Where is our FDR for the new century ???
#4–Ah Yea==good post. The world trades oil in dollars? I don’t know , so educate me.
Why would that be true? France, Germany, and England buy oil from Iran in dollars and not Euro’s? I “assume” Iran buys stuff from those places as well as from Russia and China and Japan who all have their own currency as well as Euro’s. China has a few dollars they would like to use for something other than buying up every business on the stock exchange?
I also assume if all oil transfers are done with dollars that that condition won’t last “forever?”
All currency is fungible and equatable. Does it really make any difference at all other than minor transaction costs as you indicate?
Thanks.
8-You’re out of your mind, and crazy ass thoughts like yours is what got us into Iraq.
They have no obligation to continue to use our money for their transactions, if they want to do it, more power to ’em.
What’s it going to take to make that group of people who think Bush is doing a good job to change their mind? His policies have directly resulted in $4 a gallon gas, the economy crumbling, and the US infrastructure in disarray. Now we have McCain and Hillary calling for a 3 month ‘break’ from the gas tax that will result in 300,000 US workers in transportation to lose their jobs and $9 BILLION in US road money being lost.
#4
#13 – Brian
You are very naive if you think the president is responsible for high gas prices. The high prices we are enjoying is a direct result of congress not allowing us to drill for our own oil and build more refineries.
Judging from the amount of pork and waste it’s clear that the people already pay enough taxes. A 3 month relax on the gas tax won’t be as devastating as you suggest.
#13, Brian: Good thing you brought up that bad idea of the Gasoline Tax holiday. I somehow think that all the stupid idea will do is inflate the cost of gas even more in the end and we, the American public, will lose a ton of Tax revenue. Not a good idea. Think about it people. Say the do get that gas tax holiday, then that means the cost of gas will instantly drop by .18 per gallon for that time period. But who’s to say the gas companies won’t raise the cost of gas by .18 right away? They don’t care if you or I can afford it. All they see is an opportunity to make a profit from that. I doubt it would be illegal for them to raise the price by that amount or a similar amount. Then when the so-called gas tax holiday is over then gasoline will be even more expensive.
Solution should be alternative fuel which the US could produce within it’s borders in abundance. Don’t we hold the highest reserves or plutonium in the world? Like I said above, more Nuclear power plants and solar and wind farms! Electrify the cars. Build infrastructure for that type of vehicle fuel. I know it would be expensive but I think, the way the oil reserves are going around the world and the whole “Global Warming” fear, it may be one of the only solutions to get us out of this mess. God it’s so frustrating!
#4
How wonderfully insular and American of you.
It may surprise you to learn that there are oil companies that are not based in GOUSA. Even Exxon, who you mention, have business outside the USA. Exxon (or Esso, as they are known here) sell refined product in Europe, for which they get paid in Euro. Some of that Euro goes to pay expenses incurred in Europe, but more of it is converted back to USD to buy more crude. This gives Exxon the option of not incurring that exchange cost. Insted they can use the Euro to buy some crude directly.
This goes double for those companies based primarily outside the US. For companies like Maxol keeping USD cash reserves is an expensive necessity. This gives Maxol the option of converting some (or maybe even all) of its rapidly depreciating USD cash into Euro. Since most of it’s revenue and operating expense is in Euro this saves a significant amount of money.
Then of course there are the national governments outside the USA. China holds truely staggering USD reserves, which are falling in value at an alarming rate. This gives China the opportunity to convert some of that depreciating asset into more stable Renminbi or Euro, and use it to buy energy. China needs a lot of energy, so if (when) it starts to do that you can expect to see even more value flowing from the USD to RMB or EUR.
This is not a stupid deal for Iran. It gives Iranian oil exporters a true unique selling proposition, and any salesman will tell you that a strong USP is what turns an also-ran into a preferred trading partner.
15-So the President isn’t responsible for billions of dollars being pissed away in Iraq for an unjust war? A war that was sold on the idea that the oil revenues would pay for it?
If you believe for a second that billions of dollars being wasted in Iraq instead of being spent at home wouldn’t mean economic conditions being better at home, it’s YOU who is naive my friend.
The whole saber rattling against Iran began when Iran first began openly talking about dumping the U.S. dollar as far as oil transactions go. That is what all this war talk is about. Not about nukes or Iranian sponsered terrorism, thats all just an excuse/cover for all those in this country who take the MSM and gov at face value, but about their oil not being pegged to the American dollar. Kinda ironic that the American Goverment totally trashes the U.S. Dollar tile its worthless then threatens war against countries who want no part of the worthless currency.
#12, Bobbo. You ask and I deliver!
http://tinyurl.com/65wewn
http://tinyurl.com/28m5os
These explain in enough detail the US dollar as a standard of trade currency, especially for oil
You know what? BUSH IS RESPONSIBLE for this.
He had the “last clear chance” to avoid our crippling dependence on oil. As an oil man, I’m surprised he didn’t understand it (not really!).
No explanations needed. Everybody understands the concept and its related components and is either sad, or repuglikan.
#20–Ah Yea==forgive me in advance: “Just like Chinese take-out huh?”
I will read with interest and post back later tonight. Will pay special interest to see if they address the issues #17 raises.
Thanks.
http://youtube.com/watch?v=6r9f6lrby7Q
#18 – Brian
War funding is a separate issue and again congress is responsible for allocating funds. The president requests funds but congress has the power to say yes or no.
The president also bears responsibility since he is the one that makes the request. This however has little to do with the rising price of gas.
Big whoop. It is just political posturing. He is only making it more expensive to trade with Iran, so it will be his loss.
Money is money. As Tina Turner said “DEUTSCHMARKS OR DOLLARS
AMERICAN EXPRESS WILL DO NICELY – THANK YOU”
#25 Ron,
You missed the point I was trying to make, so I’ll try again.
This may make it more expensive for American companies to trade with Iran for crude, but America is not the entire crude market.
Having the facility to buy some crude in Euro or other currencies will make it easier and cheaper for companies that have Euro revenue to buy crude, and it gives companies and governments the option to reduce their USD reserves without endangering their energy security.
Yes, this will make it more expensive for American companies to buy crude from Iran, but Iran is making a considered decision to sell less to America and more to the rest of the world.
The only countries to lose out on this deal are the US and other countries whose currency is pegged to the USD. For the rest of the world it is a good deal.
#20–Ah Yea==didn’t take that long. #23–JPV==thanks for the confirming video.
What I mostly got from the references is that indeed American misadventure is costing us greatly.
Is American Big Oil so international that they don’t care about American Downward spiral or did BushCo ignore them too for the short game windfall?
Did BushCo ignore the G-8 or what do those money men actually talk about when meeting to talk about money in its international role?
I don’t think Bush invaded Iraq to prevent going off the dollar standard. Just a coincidence that is easy to allege. Don’t “know” that, just don’t think it. Issues are multi-factorial and single issue analysis which is about all we humans are capable of, just don’t explain it.
As usual, the dismal science remains outside of my puny grasp.
Isn’t illegal for US companies to do business with Iran?
The US is not buying Iranian oil, I believe it hasn’t done so since 1978. The Iranians are curtailing US economic involvement in their affairs, by this economic sanction, and by the newly announced oil and gas pipelines overland to Pakistan and India. Effectively, they have unilaterally imposed an economic and trade boycott on the US, and denied you access to the largest untapped reserves of Arabian sweet crude. And all they needed to use, was a telephone.
Folks, many of you just aren’t getting it.
The point is, that after Nixon took the dollar off of the gold standard back in the early 70’s, he made a deal with the Saudis to insure that they enforced all OPEC nations sell oil in dollars.
Other countries NEED to hold dollars so that they can buy oil.
THIS IS ONE OF THE MAIN THINGS THAT GIVES THE DOLLAR IT’S VALUE.
If the rest of OPEC, and Venezuela, switch to the Euro, you can kiss the US goodbye…
http://youtube.com/watch?v=6r9f6lrby7Q
It was just a matter of time. The dollar just keeps falling. Iranians did it first but it won’t be long before other nations follow suit. Be a smart move for them, Russia for example, would probrably do alot better with Euro based oil. Would we go back to the cold war over that?
#31–JPV==how can the USA maintain its artificially higher than it should be standard of living (imports over exports) if all we have is food and military? Are those two items enough to continue to extort the world?
If not, how long before our victims band together to equal the playing field?