Analysis: Iran moves to ditch U.S. dollar

Don't they know what happened to Saddam when he tried that?



http://www.upi.com/International_Security/Energy/Analysis/2007/09/10/analysis_iran_moves_to_ditch_us_dollar/6990/

By DEREK SANDS
UPI Correspondent
WASHINGTON, Sept. 10 (UPI) -- Faced with U.S. economic sanctions and a weak dollar, Tehran is demanding foreign energy companies do business in yen and euros, despite increasingly desperate need for investment.

In a deal announced last week, Japan’s Nippon Oil agreed to buy oil from Iran using yen instead of the traditional U.S. dollars. The agreement comes after years of Iranian efforts to shift its petroleum exports away from dollars and toward yen and euros.

With refineries in need of investment and vast natural gas deposits in need of foreign companies for development, Iran is trying every avenue to extricate itself from U.S. sanctions.

“In general, a key motivation is the U.S. informal sanctions pressure that the Treasury, and Undersecretary Levey in particular, put on banks not to do financial transactions with Iran. And increasingly designating banks with ties to certain Iranian entities as unable to perform the U-turn transactions for dollar-denominated transactions,” according to David Kirsch, the manager for market intelligence at the international energy consultancy PFC Energy.

U.S. Treasury Undersecretary for Terrorism and Financial Intelligence Stuart Levey has been in charge of coordinating U.S. sanctions against Iran since 2004. In recent months the U.S. Treasury has increased pressure on foreign banks not to deal with Iran, including so-called U-turn transactions, which “allow U.S. banks to process payments involving Iran that begin and end with a non-Iranian foreign bank,” according to the U.S. Treasury.

Shifting to euros and yen allows Iran some relief.

“Overall it does lower some of their exposure to this successful yet informal pressure from the U.S.,” Kirsch said.

Iran has the world’s second-largest reserves of crude oil, is the world’s fourth-largest exporter of oil, at 2.5 million barrels per day, and depends on export revenue for almost half of its government revenue, estimated at about $46.9 billion in 2006. Japan is Iran’s largest customer for oil.

Iran’s turn to the yen or euro may help in some ways, but U.S. sanctions are still a danger.

to keep the almighty petro-dollar king reserve currency...if opec started to accept euro's etc instead of the dollar for their oil other countries would have no need for dollar reserves, they unload...our economy collapses, period.

That may assist Iran in the short term but it is another action in the world's trend of turning away from the dollar. The dollar continues to fall against other currencies. The Fed continues to print and issue more worthless paper. The house of cards is shaking and some cards are falling off. Uncontrolled inflation is the future if the world loses confidence in the dollar.

months or years seem to be falling into place pretty quickly lately. Always thought I'd one day see the headline "Iranian Oil Bourse Open For Business" ..... but it seems like it's turned out to be a slow phase in process with no big announcement ... K&R. :kick: and Peace.

We need to go against tradition and get someone in office that doesn't fit the corrupt political systems mold. We need a out of the ordinary candidate, not just the norm to continue destroying our country. This election is the peoples one chance before it goes even worse, I hope we don't make the same old decisions and can look outside the box.

Why accept a failing currency for something as valuable as oil?

And Congress is about to give Bush* fifty billion to blow the hell out of Iraq. Their annual revenue is under fifty billion.. We blow that amount in a few months in Iraq