Ending $ Monopoly
Once the much-publicized Oil Bourse is established--many say in April--the long-sought objective of replacing the US dollar with the euro in OPEC transactions will come one major step closer to reality.
For over 30 years now, the issue of replacing the greenback in oil deals has been discussed. However, the heated debates have not yet produced any concrete results. Nevertheless, the old proposal remains as a weapon at the hands of the Arab member-states of the Organization of Petroleum Exporting Countries to regulate their relations with the United States.
They raise the issue at one point, and then reject it to prove their loyalty to the superpower.
The Oil, Gas and Petrochemical Bourse, which will be established as envisaged in the Fourth Five-Year Plan (2005-2010), has received support from both the Parliament and the government. It will also enable oil-rich Iran to regulate prices at home without having to follow other countries’ dollar-based trading system.
Iran’s Oil Bourse can help the world oil market get rid of the present dollar monopoly--what many observers think will put the global status of the major currency at risk.
World oil prices are set in London and New York today where OPEC member-states do not have a decisive role.
Experts believe that once the Caspian Sea oil producing countries also join Iran’s Oil Bourse, world oil market is likely to experience a revolution. Proponents of the Oil Bourse believe that oil producing countries need to take such an important initiative notwithstanding the risks and barriers.
They believe that OPEC member-states have lost 72 percent of their nominal revenues on the fall in the value of the dollar and their declining purchasing power.
One thing to remember is that OPEC countries receive dollars for their oil exports and will have to spend the same dollars in trade transactions with countries whose currencies are rivaling the greenback all the time.
Kamal Daneshyar, a senior parliamentarian, contended that the Oil Bourse will help promote Iran’s petroleum business as it will attract customers from around the world.
Iranian authorities are optimistic that the Oil Bourse will provide many countries with an opportunity to trade oil with currencies other than the US dollar.
This optimism also applies to the European Union, which is one of the largest energy consumers in the world and whose currency the euro is the proposed alternative to the dollar.