Originally posted by Gools
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Iran's decision to set up an oil and associated derivatives market next year has generated a great deal of interest.
From an economic perspective, invoicing oil in euros would be logical for Iran as trade with the euro zone countries accounts for 45% of its total trade. More than a third of Iran's oil exports are destined for Europe, while oil exports to the United States are non existent.
It is primarily the US which stands to lose out from any move away from the petrodollar status quo, it is the world's largest importer of oil and a move away from invoicing oil in dollars to euros will undoubtedly have a negative effect on its economy.
Fewer nations would be willing to hold the dollar in reserve which would cause a significant devaluation and result in the loss seigniorage revenues. In addition, US energy-related companies stand to lose out as they will be unable to participate in the bourse due to the longstanding American trade embargo on Iran.
License for Arab investors to enter Iran bourse
LONDON, December 24 (IranMania) - Preliminary licenses have been issued to facilitate the presence of investors from Arab countries in Iran's Stock Exchange, said, Heydar Mostakhdemin-Hosseini, who heads the board of directors of the Iranian Stock Exchange Council, MNA reported.
In light of the new regulations on attracting foreign investments to Iran's stock exchange, we have received many requests mainly from Arab countries including Lebanon, Kuwait and Saudi Arabia, some of which were given preliminary licenses required for the process, noted Mostakhdemin, adding that some other applicants from other countries have also been furnished with basic information in this regard.
Based on the regulation, foreign investors are authorized to invest in the country and exchange their currencies with the Iranian rial, the chairman explained in conclusion.
Russia aims to firm ties with OPEC
Reuters, Bloomberg News
Monday, December 26, 2005
Russia and the Organization of Petroleum Exporting Countries agreed on Monday to hold annual ministerial meetings in an effort to increase openness in the oil market as Russia assumes leadership of the Group of 8 countries.
Annual talks will cover energy policies, information exchange, investment in oil production and refining, and market developments, the ministry said in a statement.
"Russia's presidency in the G-8 will be a chance for producing countries to send the right information to consuming nations and show our willingness to cooperate"... [the] the president of OPEC, Sheik Ahmad Fahad al-Ahmad al-Sabah [said]
President Vladimir Putin of Russia is using his country's position as one of the world's two biggest oil producers, just behind Saudi Arabia, to gain a greater role in international politics.
OPEC, Sabah said, does not see Russia as a rival...
Russia has begun meeting with major oil consumers like the United States, Japan, the European Union, India, China and South Korea before the G-8 summit meeting next year in St. Petersburg, Russia, Khristenko said.
Putin's government has made energy security a priority for the G-8 next year and will encourage members to increase the use of exchanges for trading energy commodities and to diversify supply channels, Deputy Finance Minister Sergei Storchak has said. India, China and Brazil, which are not members, will be invited to G-8 meetings next year, he said.
OPEC's 11 members, including Saudi Arabia, supply about 40 percent of the world's oil. They have said they plan to cut production after March [there's that timeline again] to offset an expected fall in demand and sustain world oil prices, Sabah said last week in Beijing. [because we all know they need to be sustained at $64! ]
Originally posted by Souljah
In November 2000, Iraq began selling its oil in euros, its Oil For Food account at the UN was also transferred into euros and later it converted its $10 billion UN held reserve fund into euros.
Euro Gained a 17% gain over Dollar from 2000 until the 2003 Invasion.
After the Invasion - everything back to Normal
Originally posted by soficrow
Souljah - do you have links for this info?
It's downright .....unsettling.
A Russian government source told Kommersant that they became convinced in Moscow after a Russian Security Council delegation visited Teheran that the Iranians are not bluffing and intend to stand up for their right to develop a nuclear program. Russian negotiators in Teheran said that the Iranian authorities have decided not to avoid direct military confrontation if things come to that. In Moscow, they think that an American armed action could begin this year.
Kommersant has received information that, in connection with that, the Kremlin is already developing an evacuation plan for Russian specialists in case of military action in Iran. Attention is also being paid to the likelihood that the Iranians could try to detain the Russians to use them as “living shields.” There are about 3000 Russian citizens in Iran at the present time.
Iran 'years from nuclear bomb'
Iran has alarmed the international community by removing the seals at its nuclear fuel research sites - but experts say it is several years away from being capable of producing a nuclear bomb.
Frank Barnaby, consultant for the UK security think tank the Oxford Research Group, agrees that Iran does not yet have a critical number of centrifuges in place.
"They don't currently have enough centrifuges working - so far as we know - to produce significant amounts of highly-enriched uranium or even enriched uranium. They would need a lot more," he told the BBC News website.
Even if the plant is made fully operational, it is currently configured to produce low enriched uranium (LEU) rather than the weapons-grade highly-enriched uranium (HEU).
So given these limitations, the IISS believes it would take Iran at least a decade to produce enough HEU for a single nuclear weapon.
Dr Barnaby agrees.
"The CIA says 10 years to a bomb using highly enriched uranium and that is a reasonable and realistic figure in my opinion," he said.
Last Tuesday, U.S. Secretary of State Condoleezza Rice called Lavrov and warned him that, after that, Washington would not wait for the next IAEA meeting in March, but would have the Iranian dossier transferred to the Security Council within the next few weeks.
Originally posted by Gools
It's the Euro oil bourse.
What the Iran 'nuclear issue' is really about
...I pointed out that the structure of global oil markets massively favors intermediary traders and particularly investment banks, and that both consumers and producers such as Iran are adversely affected by this. I recommended that Iran consider as a matter of urgency the creation of a Middle Eastern energy exchange, and particularly a new Persian Gulf benchmark oil price.
It is therefore with wry amusement that I have seen a myth being widely propagated on the Internet that the genesis of this "Iran bourse" project is a wish to subvert the US dollar by denominating oil pricing in euros.
As anyone familiar with the Organization of Petroleum Exporting Countries [OPEC] will know, the denomination of oil sales in currencies other than the dollar is not a new subject, and as anyone familiar with economics will tell you, the denomination of oil sales is merely a transactional issue: what matters is in what assets (or, in the case of the United States, liabilities ) these proceeds are then invested.
We subsequently learned that the delay had been due to initial opposition from the Saudis and this opposition was withdrawn after the attacks of September 11, 2001, and the subsequent US-led invasion of Iraq.
As anyone familiar with the City of London and Wall Street will know, transparency is the enemy of private profit, and it is this factor that was behind the delays in developing the bourse project.
One of the most interesting aspects of the process was that during our brief spell of contacts with decision-makers, some insight into current Iranian policy was possible - in particular, the nuclear question. In our conversations we were left in no doubt that it suits both the US and Iran for the issue to be seen to be that of the Iranian "threat" from nuclear weapons.
In fact the issue is a proxy for Iraq:...
Now that pro-Iranian Shi'ite elements are taking a primary role in the emerging government in Iraq, we see the nuclear temperature rising further.
The realpolitik is of course that those in power in the US and Iran have the reason they give - and the real reason - for what they do: and for the US, the real reason is and has been for many years energy security above any other consideration.
Iran's Ayatollah could Unleash the "Oil Weapon" in 2006, Rattling Global Markets
There's much more in depth analysis in this article than just these charts so check it out and see.
Iran backs Russian uranium enrichment plan
MOSCOW (AFP) - Iran said that it backed a plan to enrich its uranium in Russia to defuse an international row over its nuclear power programme, but warned against Western attempts to put the debate before the United Nations.
Iran’s Oil Exchange threatens the Greenback
America monopolizes the oil trade. Oil is denominated in dollars and sold on either the NYMEX or London’s International Petroleum Exchange (IPE), both owned by Americans. This forces the central banks around the world to maintain huge stockpiles of dollars even though the greenback is currently underwritten by $8 trillion of debt and even though the Bush administration has said that it will perpetuate the deficit-producing tax cuts.
America monopolizes the oil trade.
Oil is denominated in dollars and sold on either the NYMEX or London’s International Petroleum Exchange (IPE), both owned by Americans. This forces the central banks around the world to maintain huge stockpiles of dollars even though the greenback is currently underwritten by $8 trillion of debt and even though the Bush administration has said that it will perpetuate the deficit-producing tax cuts.
Originally posted by mbkennel
Forex reserves may diversify away from the US$ but the iranian oil exchange is but a pimple on the gnat's butt in this.
Those arguing that the denomination of sales is crucial to dollar strength have tended to say that countries are forced to save dollars so that they have dollars to buy oil. Their critics, however, reply that you do not have to save in dollars to buy oil since you can save in whichever currency you want and then buy dollars on the foreign exchange market whenever you want to buy oil. What matters, say the critics, is in which currency people ultimately save rather than in which currency they trade. (6,7) It is people saving in dollars, or in US financial assets, which results in high levels of investment in the US and ultimately permits the US to run a huge trade deficit.
The latter argument is largely correct, but it leaves out the crucial fact that the reason countries choose to save in dollars, to a far greater extent than in any other currency, is nonetheless related to the fact that oil is sold in dollars. Yes, what is important is in which currency countries save, but this is to a significant extent determined by which currency they trade in.
In order to understand why, we need to ask ourselves, why do central banks keep foreign exchange reserves at all? Also, what considerations determine which currency they choose to keep as reserves? The answer ...