Big oil producing nations denied a British newspaper report on Tuesday that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the U.S. dollar with a basket of currencies in trading oil.

The dollar eased in response to the report, which was written by The Independent’s Middle East correspondent Robert Fisk and cited unidentified sources in Gulf Arab states and Chinese banking sources in Hong Kong.

It said the proposal was for trade in crude oil to move over nine years to a basket of currencies including the Japanese yen, the Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, which includes Saudi Arabia and Kuwait.

The report coincides with a wider debate on the role of the dollar as the world’s reserve currency, which has come under question. For most of this decade, the United States has struggled to maintain the dollar’s value.

But top officials of Saudi Arabia and Russia, speaking on the sidelines of International Monetary Fund meetings in Istanbul, denied there were such talks. The two countries are the world’s largest and second-largest oil exporters.

Asked by reporters about the newspaper story, Saudi Arabia’s central bank chief Muhammad al-Jasser said: “Absolutely incorrect.” He repeated the same response when asked whether Saudi Arabia was in such talks.

Kuwait’s oil minister and a well-placed source in the Organization of the Petroleum Exporting Countries made similar remarks. Russia’s deputy finance minister Dmitry Pankin said: “We did not discuss this at all.”

The dollar slipped in the wake of the newspaper story. The euro edged up as high as $1.4749, although it fell back to $1.4701 when the Saudi Arabian and Russian officials denied the report. Oil prices rose above $71 a barrel on Tuesday.

Algerian Finance Minister Karim Djoudi told Reuters: “Oil producing countries need to stabilize revenues but…I don’t see a need for oil trade to be denominated differently.

“But we are at the IMF conference where all sorts of subjects are raised and discussed,” he added.

‘NOT LIKELY’

Analysts said that while individual countries would find it relatively easy to stop using the dollar in oil trades, as Iran has done, replacing the currency in which oil is priced would require a massive effort.

The newspaper story did not make clear how the change would work, and many analysts doubted it would occur any time soon.

“I don’t think this is a likely scenario in the short to medium term,” said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt. “Without Saudi Arabia’s support it is difficult to imagine that the dollar will be replaced.”

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The Independent said U.S. authorities were aware that the meetings had taken place but had not discovered the details and were “sure to fight this international cabal.”

[Food For Thought]

Believe me it’s not as absurd as it sounds.

China has an economy of approximately $4 trillion, the same size as that of Japan. The United States has an economy of $14 trillion. China has a population of approximately 1.2 billion. Japan has a population of approximately 125 million. The United States has a population of approximately 300 million.

So the disparity in income, which still vastly favors the United States, is evident. Yet the fact is that the United States is declining. China is ascending. While the dollar is collapsing, the Yuan is rising. The heroes of Wall Street, some of whom believe in stealing from the world and giving to themselves, are driving the stock market higher because the dollar is collapsing.

American goods will be priced less than Chinese goods.

So the income of Chinese workers will increase due to the increase in the value of the Yuan while those of American workers will decrease with the decrease in the value of the dollar. American goods will become cheaper. This will power American exports because those ubiquitous plastic flip flops will be cheaper to produce in America than to produce in China.

This is good news for farmers because American beef, pork and lamb will then be exported to China due to the dollar’s collapse. This would be good news for the auto industry because with low labor costs and no pension benefits, the American auto industry would eventually be owned by Chinese and Indian companies. American cars will once again be exported throughout the world.