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Iran has decided to conduct its oil trade in euros, not US dollars, unconfirmed reports have suggested. Economic analyst Shabbir Razvi told Radio Sputnik that Tehran is apparently playing a "delicate" chess game with Washington.
"Iran is trying to make its relationship with the US and the world more amiable than it has been in recent past. However, at the same time Iran does not want the US to become any stronger. This is really a chess game the Iranians are playing vis-à-vis the US," Director of the International Dialogue Foundation in London noted.
Iran's oil contracts in euros already include recently signed deals with French Total, Russia's Lukoil and Spanish Cepsa, an unnamed source in state-owned National Iranian Oil Company told Reuters on Friday.
The underlying logic behind Iran's decision is simple: if Tehran moves away from the petrodollar, the US will have less control over the oil market. At the moment, the US dollar is the currency for any multinational commodity transactions, particularly for oil trade.
"Saddam Hussein began selling oil in euros and we know what happened to Iraq after 2001."
originally posted by: FamCore
a reply to: kloejen
That didn't work out so well when Saddam tried to switch to Euros, or when Gaddafi tried to start up the Dinar.
But by all means, go for it. Didn't we just give them something like $100 billion as part of that nuclear deal as well? Kind of an "in your face" move, is this what we get for demonizing Iran for so long?
originally posted by: 3NL1GHT3N3D1
Of course it's all planned. Iran KNOWS this will end badly for them, so why in the hell would they do it? Because it's what those in power want. Iran is not dumb, they would not be doing this unless there was a reason.
The end result would be EXACTLY what Europe needs right now.
originally posted by: paraphi
The death of the petrodollar seems to be a recurring topic. It has not really happened yet, has it.
What we have is low oil prices. Well lower than the braekeven price of Iranian oil that is well over $100 per barrel. Iran, like most oil producers is losing money hand over fist.
The petrodollar is pretty irrelevent at the moment.
I am not entirely sure why you guys get excited over this.
growing global demand for oil leads to an increase in U.S. dollar demand. This artificial demand for U.S. dollars has provided remarkable benefits for the U.S. economy. It has also required the Federal Reserve to keep the dollar in plentiful supply.
By perpetually expanding the U.S. money supply, America’s standard of living increases as well.
The problem with this situation is that the only way that it can be sustained is if the demand for the dollar and for U.S. debt securities remains consistently strong.
Grasping this last point is extremely important. For if the artificial global dollar demand, made possible by the petrodollar system, were ever to crumble, foreign nations who had formerly found it beneficial to hold U.S. dollars would suddenly find that they no longer needed the massive number that they were holding. This massive number of dollars, which would no longer be useful to foreign nations, would come rushing back to their place of origin… America.
Obviously, an influx of dollars into the American economy would lead to massive inflationary pressures within our economic system.
It is difficult to overstate the importance of this concept as the entire American monetary system hinges on this “dollars for oil” system. Without it, Washington would lose its permission slip to print excessive numbers of dollars.
It is difficult to overstate the importance of this concept as the entire American monetary system hinges on this “dollars for oil” system. Without it, Washington would lose its permission slip to print excessive numbers of dollars.