OPEC’s Secretary-General, Abdullah al-Badri, told the Middle East Economic Digest, there is a strong possibility the price of oil will switch from being pegged with dollars to the euro being the hallmark of how oil prices are determined. “Maybe we can price the oil in the euro. It can be done, but it will take time.” He admitted OPEC was under great pressure from nations like Venezuela to make the switch since the decline of the dollar is impacting their wealth. “In oil exchanges in New York, Singapore or Dubai, you can see the currency is the euro or the yen,” he said.
It took two world wars and about fifty years to enshrine the dollar as the method of pricing the price of oil. The value of the dollar has declined 44% against the euro within a decade, and this concerns oil producers. They hesitate at this point to make switch due to fear a drop in the price of the dollar would impact their trillions invested in the United States.
George Bush ran his campaigns claiming Republicans were the party fo fiscal responsibility. It is during his watch that the dollar has declined so precipitously. So much for another Bush claim to fame.
President Mahmoud Ahmadinejad of Iran said he had no intention of using oil as a weapon in his conflict with the United States, but if President Bush authorizes an attack on his nation, we “know how to react.” He claimed, “We would never want to use oil as a weapon or to take any illegal actions… but if American takes any action against us, we will know how to reply.” His comments came at the conclusion of an OPEC meeting at which Iran’s leader raised the issue of whether or not it was time to cease linking the price of oil to the American dollar. There are fears due to ambiguous comments from the Bush administration that the United States might take some offensive action against Iran which would probably result into an oil embargo or blocking of oil shipping channels. Ahmadinejad was hopeful and said, “my prediction is that no war will break out in the region.”
As a result of pressure from Venezuela and Iran, OPEC will examine its historic policy of linking oil prices to the American dollar. There is some feeling of pricing oil based on the euro. The fall of the American dollar has impacted oil producing nations because their price is based on the worth of the US dollar.
Posted in George Bush, Iran, Iraq War, Military, Peace, Politics, United States, US Foreign Policy, War, World News
Tagged Iran, Oil war, OPEC, US dollar