Iran Stops Accepting US Dollars for Oil

Peter Goodchild · Post by **Peter Goodchild** » 09 Dec 2007, 17:51

My guess is that this is going to be big trouble. The US dollar may really fall. The dollar has been kept artificially high for years mainly because the world?s oil is traded with US dollars.

About two years ago, there were lots of stories based on the idea that Bush had a huge dilemma coming up: either (1) bomb Iran or (2) watch the dollar plunge when Iran says no to dollars. I'd given up waiting for the dilemma to be resolved. Is this the magic moment?

http://en.rian.ru/world/20071208/91488137.html

IRAN STOPS ACCEPTING U.S. DOLLARS FOR OIL

TEHRAN, December 8 (RIA Novosti) - Iran has stopped selling its oil for U.S. dollars, the Iranian ISNA news agency said on Saturday, citing the country?s oil minister.

?In line with a policy of selling crude oil in currencies other than the U.S. dollar, the sale of our country?s oil in U.S. dollars has been completely eliminated,? ISNA reported Oil Minister Gholamhossein Nozari as saying.

He also said ?the dollar is no longer a reliable currency.?

Iran is the world?s fourth-largest crude oil producer.

At a November summit of Organization of the Petroleum Exporting Countries heads of state, Iran proposed that oil sales be carried for a variety of currencies, excluding dollars, but was not supported by any other members except Venezuela.

Iranian President Mahmoud Ahmadinejad had previously called the U.S. currency a ?worthless piece of paper.?

2007 has seen a significant fall in the value of the U.S dollar against other major world currencies.

Tensions remain high between Iran and the U.S., which has accused the Islamic Republic of attempting to build a nuclear weapon, as well as providing insistence to insurgents in Iraq.

The U.S. National Intelligence Estimate (NIE), published on Monday, stated that Tehran had put a stop to weapons production in 2003, although it was continuing to enrich uranium.

The report contradicted a previous U.S. intelligence assessment in 2005 which said that Iran was actively pursuing a nuclear bomb.

U.S. President George W. Bush remained hawkish, despite the report, saying on Tuesday that, ?Iran was dangerous, Iran is dangerous and Iran will be dangerous if they have the know how to make a nuclear weapon.?

When asked if military action remained an option, the president answered, ?The best diplomacy - effective diplomacy - is one in which all options are on the table.?

End

Post by **kenneal - lagger** » 09 Dec 2007, 18:33

With a bomp Iran can destroy a city in the US. Without the dollar they can bring the whole country down. Why bother to build a bomb?

Totally_Baffled · Post by **Totally_Baffled** » 09 Dec 2007, 18:56

Does it really matter what oil is traded in?

Surely what is important is what countries do you with their oil revenues once they receive them?

If a country doesn't like dollars (in the past or in the present) - what has stopped them just trading them into another currency, gold, or stocks etc the minute they received those dollars?

If you receive euros for your oil, but then go out and buy US dollar assets, T - bills, dollars etc - then the dollar retains its value/demand?

jonny2mad · Post by **jonny2mad** » 09 Dec 2007, 20:59

Is it likely that they would go out and buy dollars who in their right mind would buy dollars now

oilslick · Post by **oilslick** » 09 Dec 2007, 21:38

Is this news? I thought Iran has been avoiding the $ for a long time...

Totally_Baffled · Post by **Totally_Baffled** » 09 Dec 2007, 21:55

jonny2mad wrote:Is it likely that they would go out and buy dollars who in their right mind would buy dollars now

Well somebody is - in case you havent noticed the US is running some huge deficits right now!(which have to be financed by foreigners?)