World

Iran No Longer Accepts US Dollars for Oil

by Dave Keating | May 1, 2008 at 04:04 am

1119 views | 32 Recommendations | 8 comments

As fears grow that both China, with its massive foreign currency reserves, and the Middle Eeastern oil states will move from the dolalr to the euro as their favored international currency, Iran has announced that it is no longer accepting US dollars for oil, only euros and yen. Is it the first domino to fall?

Iran, OPEC's second-largest producer, has completely stopped conducting oil transactions in U.S. dollars, a top Oil Ministry official said Wednesday, a concerted attempt to reduce reliance on Washington at a time of tension over Tehran's nuclear program and suspected involvement in Iraq.

Iran has dramatically reduced dependence on the dollar over the past year in the face of increasing U.S. pressure on its financial system and the fall in the value of the American currency.

Oil is priced in U.S. dollars on the world market, and the currency's depreciation has concerned producers because it has contributed to rising crude prices and eroded the value of their dollar reserves.

"The dollar has totally been removed from Iran's oil transactions," Oil Ministry official Hojjatollah Ghanimifard told state-run television Wednesday. "We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies."

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Sanjay Jha

flagged this story as Good Stuff

at 04:10 on May 1st, 2008

Dave Keating, I like this story. It's good stuff. So Euro is the currency of the future?

Dave Keating

at 04:36 on May 1st, 2008

Start hoarding your euros now! I know I am.

Jordan Yerman

at 05:29 on May 1st, 2008

Actually, the second... Iraq also moved from the petroDollar to the petroEuro, and it didn't turn out so well for Saddam- economically, this was the US's main reason for invading: not controlling the oil itself, but how the oil is bought and sold. If petroDollars are no longer accepted, all of those debts can be cashed in for, well, cash, whereas now the same cheques are circulated over and over again.

borisattva

at 05:39 on May 1st, 2008

great story.

i wonder how how this will affect further U$ inflation, since it limits of the number of ways a $ can be spent, levaing more of them to be spent where they can be.

Karen Hatter

flagged this story as Good Stuff

at 07:24 on May 1st, 2008

Dave Keating, I like this story. It's good stuff.

Rhonda J Mangus

flagged this story as Good Stuff

at 07:44 on May 1st, 2008

Dave Keating, I like this story. It's good stuff.

René

at 10:10 on May 1st, 2008

What else is new? We don't buy Iran's oil anyway. And get this, VP Cheney started moving all his money into Euros back in 2006, literally many millions.