Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

reply to post by Gools


not to mention that Greenspan thinks the euro will be the new reserve currency.. not the dollar.
Euro could replace dollar as top currency-Greenspan

Could? forget that it's already happening.

Originally posted by kilcoo316
Uhm, does Russia and China (definitely China) not have LARGE agreements with Iran for oil/gas supply.

They would be mighty pissed if their supply was interupted or terminated...

[edit on 9-10-2005 by kilcoo316]

The purpose of the Iraq and coming Iran invasions is TO STOP OIL SUPPLY TO CHINA!!!!!!!!!!

Russia and China is used to pissed off by USA, Japan could not stand it and invaded Pearl Harbour.

Jews mind is short and can't go far!



[edit on 28-9-2007 by Cibai]

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You have an important U2U

[edit on 30/9/07 by masqua]

Iran will not even be an Oil Exporter but an Oil Importer by 2014. How do you expect them to be changing currencies on how they trade their oil?

Originally posted by True_Confederate
Iran will not even be an Oil Exporter but an Oil Importer by 2014. How do you expect them to be changing currencies on how they trade their oil?

Iran

Iran has the world's second largest reserves of conventional crude oil at 133 gigabarrels, according to the CIA World Factbook, although it should be noted that both Canada and Venezuela have larger reserves if Non-conventional oil is included. Iran is the second largest oil holder globally with approximately 10% of the world's oil.

Iran averages about 1.5 gigabarrels per year (88 years of future production), which is a significant decline from the 6 gigabarrels per year it produced when the Shah of Iran was in power. The United States prohibits imports of oil from Iran, which limits its exposure to an Iranian oil cutoff, but does not reduce the likelihood that an interruption of Iranian oil would cause a spike in world oil prices. American pressure on Iran to renounce Iran's nuclear program makes the possibility of military confrontation quite high, and the political risks of Iranian oil far outweigh any geological ones.

en.wikipedia.org...

It's not that i consider Wikipedia to the the final word on anything but what led you to claim that Iran may not be able to export oil by 2014? Will it result from a foreign occupation force, lack of state investment in oil infrastructure, a massively booming economy that consumes all the oil or non of the above?

Stellar

What led me to make that claim is market analysts and the Geological News Paper Geo-Times which sited the journal Geology as its source.

The understanding is that Iran consumes oil too, for personal and public use, for industry etc. Iran's economic growth will cause Iran to consume as much oil as it can possibly produce by 2014 (while there is a lot of oil there's not a lot of room for more oil production their facilities are maxed out).

Iran knows this which is why it has been trying to go nuclear (most of its power plants are oil fueled).

So to say easily it is 'none of the above' but more akin to a growing economy. It won't take a massively booming economy Iran is reaching its production limits already and is feeling the strains on what is capable of being exported. But it is because of the growing economy that Iran will not have exportable oil in 2014.

Originally posted by True_Confederate
What led me to make that claim is market analysts and the Geological News Paper Geo-Times which sited the journal Geology as its source.

Ok.

The understanding is that Iran consumes oil too, for personal and public use, for industry etc. Iran's economic growth will cause Iran to consume as much oil as it can possibly produce by 2014 (while there is a lot of oil there's not a lot of room for more oil production their facilities are maxed out).

Well either they article were simply not including all the facts or you are not telling it all! Iran can not use anywhere near what i can produce with proper investment but since their current government is kinda fighting for survival and they are not investing their oil money in developing it's known reserves.

[quote[Iran knows this which is why it has been trying to go nuclear (most of its power plants are oil fueled).

Iran's nuclear reactors are being funded in large part by Russia so the electricity produced will be quite cheap giving the Iranians the chance to divert oil and gas from their old oil and gas fired plans for export. The Iranian government is not very popular and their resulting social spending programs, to say nothing of their military expenditures, is just diverting too much money out of development. That being said developing excess capacity is simply not a good idea in a world where some countries will bomb you back into the stone age to ensure oil supply restrictions.

So to say easily it is 'none of the above' but more akin to a growing economy.

I would go with mismanagement or just basic wisdom...

It won't take a massively booming economy Iran is reaching its production limits already and is feeling the strains on what is capable of being exported.

If the Iranian government would allow the Japanese and CHinese to invest in oil development of known reserves they could export far more but clearly this will do nothing but further enrage the US and others who seek to restrict global oil supplies.

[quote[ But it is because of the growing economy that Iran will not have exportable oil in 2014.

There is really no way that Iran's economy can grow that fast if they invested proper resources in developing their known reserves.

Stellar

There's no way the reserves can be further developed. The fields are at max production yous just cannot drill more for a number of reasons. There's physical space required to drill, there's drilling capacities based on the fluid pressures in the reservoir...etc.

Iran's has matured (that is to say they've built the most rigs allowing the most production they could ever get from their known reserves).

Saudi Arabia cannot increase production beyond their max; they too are invested fully...

Finding more reservoirs allows more production but these nations' explorations are mostly tapped out.

Originally posted by True_Confederate
There's no way the reserves can be further developed. The fields are at max production yous just cannot drill more for a number of reasons.

A blatant lie if i ever saw one. Have you studied this issue at all and why do you suddenly wish to jump on the peak oil bandwagon?

There's physical space required to drill, there's drilling capacities based on the fluid pressures in the reservoir...etc.

Nonsense. Please show me where on Earth you are getting this from.

Iran's has matured (that is to say they've built the most rigs allowing the most production they could ever get from their known reserves).

Simply not true as their proven reserves should show. Where did you come up with this idea?

Saudi Arabia cannot increase production beyond their max; they too are invested fully...

More absolutely nonsense. So i guess i got it right from the start and this is just another peak oil ramble.

Finding more reservoirs allows more production but these nations' explorations are mostly tapped out.

They are not and all our data points to world reserves still growing far faster than consumption despite lower investment and high prices. Proven reserves go WAY up when prices increase but those numbers have not been worked trough the system to reflect the fact that the worlds proven reserve are now about three or four times as high as they were just three years ago!

It's fascinating how the mind of the average peak oiler just don't seem to factor in any facts.

Stellar

Update on the topic of this thread:

Iran is now 85% of the way to complete abandonment of the petrodollar.

Iran slashes oil transactions in dollars

TEHRAN (AFP) — Iran has slashed the use of the dollar in payment for its oil exports to 15 percent, an official said on Tuesday, amid growing pressure from arch-foe the United States on its financial system.

The vast majority of transactions for oil from OPEC's number two producer are now being carried out in euros, said Mohammad-Ali Khatibi, deputy head of the National Iranian Oil Company in charge of marketing.

"Iran is selling about 85 percent of its oil in the non-dollar currencies," Khatibi was quoted as saying by state television.

"Currently, about 65 percent of the oil sale income is in euros and 20 percent in yen," Khatibi added.

He also said that the remaining sums being paid in dollars, about 15 percent, are going to shift to "other creditworthy currencies".

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Alright.

A certain member who has been acting up all over the boards has been banned by senior staff.

Let's not derail this thread any further.
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Originally posted by StellarX

They need but a fraction of the USD reserves they have for oil and other imports.
According to professor H. Solomon, head of the Pretoria University Center for International Political Studies, 40% of the USD in circulation currently belong to Chinese banks. Without China and others taking USD for their goods the American economy could not go on as it is. That is clearly not in their interest so they keep accepting USD as payment for their goods.

Stellar

I knew China is stopping its' people for bringing US$ to China recently.
5 to 10 years ago the Chinese Communist encouraged its' people to export goods and bring back US$, but now that is no longer the case!
Well, let's hope they love EURO soon.
And imagine Chinese release this 40% USD circulation soon, USD will drop to rock bottom.

I like this Tom and Jerry game.

OPEC to Study Currency Basket for Pricing

Tick... tick... tick...
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Great idea G in bringing this back out of the archives.

There has to be some behind the scenes action happening here fending off the total collapse of the dollar. Although, maybe not -- since we're at "record" lows in that dept.

the yen carry trade is starting to unwind

economists and investment analysts Jim willie and Jack crooks both point out the YEN is ready to break out and appreciate substantially ( even with the BOJ and USA trying to hold it down)

IF IF IF this happens and is sustained COMMODITIES will FALL. OIL , soy, corn, gold, silver , what have you.

The yen carry trade is a large pillar of support for the current inflated asset values across a broad specturm of global bull markets and bubbles.

If the yen appreciate's particularly in relationship to the euro (EURO:YEN) then markets will fall. That is proven this year (Euro: yen ratio mirrors U.S stock markets)

in the above mentioned scenario gold would fall at first, but then gain momentum, as central banks the world over try to print more and more money, and people start to see gold as a real store of wealth.

The Euro will be the new world reserve currency in a couple year IMO, and intrest rates in the united states will rise (since foreginers will no longer foot the bill for the outrageous spending and deficit we run in the OLE' USA.) our consumer prices will rise (think any imported goods) and consumer spending drop and unemployment will have the potential to snowball. The funny things is america will never be satisfied with Iran nuclear program because this economy and superpower of ours is so moraly asz backwards. We can't allow country's dependant on dollar denominated IMF , world banks loans (in order to pay oil bills) to generate CHEAP ENERGY, HELLO! it would be bad for our petro dollar. It is that ugly. The reality is that disturbing.

We should hope the BOJ and america find a way to keep the YEN down. if not our standard of living and economy will fall (How much is the question)?

Our currency is headed downward, and that hasa been the staple of our world power and dominant military.

The nation is facing the potential/liklihood of a very dangerous economic situation that will effect everyone who lives here Unless they own check cashing store's or are bailbondsman , police jobs should be safe as well.

Yeah, I also read the Jim Willie article yesterday:

ON CURRENCY & CROSS SIGNALS

CONCLUSION

... the developing dire situation with the USDollar. In focus is the US$ as world reserve currency, the global banking system stability, foreign accumulation of reserves, lost sovereignty of US policy, imminent breakdown of the PetroDollar standard, and palpable US vulnerability.

He also mentions this story that I submitted two weeks ago: Gulf Arabs Could Drop Dollar Pegs in Unison

I also noticed that in a week where the markets are not making the big headlines (other than in the financial press) the FED has quietly injected another 47.25 billion dollars into the US banking system to "ease tight liquidity". This is the largest operation (yet again) since September 2001.

I'm no expert on currency markets, but I do know that the yen carry trade is a big -a very big- deal in international finance.
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Well let's review some of the items discussed in this thread shall we? .

A year ago (December 06), Iran announces that it will stop using the dollar for oil transactions.

In March Iran announces 60% of payments are no longer in dollars and they cut their dollar reserves and announce they will issue Euro denominated bonds.

Later that same month, China starts paying Iran in Euros and a low level trade war starts between the US and China.

In July, Japan announces it will start to pay yen for oil "in the fall".

In September Iran announces 70% percent of payments are no longer in dollars.

Japan confirms it is paying yen for oil.

Greenspan announces that the Euro is on it's way to becoming a new reserve currency.

In October Iran announces 85% percent of payments are no longer in dollars.

OPEC (of which Iran is a leading member) announces they are studying a basket of currencies to pay for oil.

Iran now announces that the move away from the dollar is complete: Iran stops selling oil in U.S. dollars

Add to that the fact the Venezuela has diversified it's reserves and barters with oil and that Russia now sells oil for Rubbles and you have to wonder about the people who are clueless as to why the US dollar has lost 60% of it's value (relative to the Euro) in recent years. It's not just about sub-prime. The whole system is falling apart.

Ramifications are coming soon to a town near you.

Do some people still think that guns and bombs are the only way to wage war?
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But the cold war is over Gools! Who is providing the military backing that makes such open aggression against American hegemony, trough it's currency, possible?

Could Iran and Venezuela really be acting alone and what's up with the Chinese and Japanese? Didn't see that one coming did we?

Stellar

Iran announced they will open the Oil Bourse Feb. 1-11, 2008.

Of course, they've said they were ready before and nothing came of it.

Update:

Iran oil bourse to open soon

senior officials from the Oil Ministry and the Kish Free Trade Zone Organization (KFTZO) will meet with members of the Majlis (Iran's parliament) Energy Commission in the near future to discuss issues related to making the groundbreaking project operational.

Salahi said the KFTZO and a number of other Iranian bodies have made large investments in the project.

The oil bourse would transact petroleum, petrochemicals and gas in various non-dollar currencies, primarily the euro. It would also establish a euro-based pricing mechanism for oil trading, or oil marker as it is called by traders.

The three current oil markers are all U.S.-dollar denominated.

Greenback's days in Iran numbered

The Iranian Company of Commodities Bourse has been tasked by the government to establish the long-awaited Oil Bourse on Kish Island.

The Cabinet of Ministers on Sunday issued an order to the Oil Ministry, Finance Ministry, Foreign Ministry and Central Bank to implement a plan to set up the Oil Bourse.

The Oil Bourse will serve as a place to trade oil products and crude oil.

The Ministry of Economy will be setting up the petrochemicals section by February 19.

The Oil Bourse is supposed to trade oil products in non-dollar currencies and many analysts hold the opinion that it could deal a blow to the already declining greenback.