Petropolitics & Iran


Howard LaFranchi, The Christian Science Monitor: August 2005


. . . . . the Iranian government quietly reaffirmed plans to create by next year a euro-denominated exchange in oil, natural gas, and other petroleum products. If successful, such an exchange could start to lap at the walls of the two existing oil exchanges - London's International Petroleum Exchange (IPE) and the New York Mercantile Exchange (NYMEX) - both owned by American companies.

If the billions of dollars in oil sales ever got going in euros, experts say, that could dry up the demand for dollars that the heavily indebted US economy depends on, and it could mean big trouble for the US economy.

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. . . . . Iran is not alone in envisioning an oil exchange in the world's major oil-producing region. Dubai is also trying to create a market, he adds, but is not finding the way easy.

Yet even as remote as the Iranian threat may be, others note that past attempts to create new markets have not been greeted warmly. None other than Saddam Hussein decided to sell oil only in contracts dominated in euros - in the months before he was ousted by a US-led military invasion.

The Iranian regime is certainly not looking to provoke a similar reaction, experts say, but on the other hand it is taking similar stabs at the global economic system as it faces waves of mostly Western-based criticism.

see also:

Iran's Oil Bourse: A Threat to the U.S. Economy?
Niusha Boghrati, 11 April 2006

Iran Oil Bourse and Petrodollar Wars
Bahman Aghai Diba PhD International Law, Persian Journal: 15 february 2006

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