Foreign Correspondence

[Amaunet]

This is why Bush is hammering on Iran. Iran’s proposed oil exchange will probably make matters worse but it is their right to trade their commodity in any manner they prefer.

We went to war in Iraq for the very same. If we gave a rat’s ass about the Iraqi economy we would let them price oil in the more lucrative euro.

The suggestion that Iraq’s move to selling oil for euros had something to do with the US threatening war against the country was just a theory. It still is a theory, but a theory which subsequent US actions have done little to dispel: the US has invaded Iraq, installed its own authority to rule the country and as soon as Iraqi oil became available to sell on the world market, it was announced that payment would be in dollars only.

See also:
#msg-994080
#msg-990369

-Am


Iran to Launch Oil Exchange

TEHRAN (AFP) -- Iran is planning to open an oil exchange in a year and will contract an international consortium to set up the body, a senior oil ministry official overseeing the plan said Tuesday.

"In addition to oil, other energy products such as oils and petrochemicals will be sold," Mohammad Javad Asemi-Pur told AFP. "Like elsewhere, the sales we be made by traders and the ministry will sell oil through them," he added.

"The ministry will sell a part of the production on this market, but this will depend on confidence and available funds." In order to launch the exchange, Iran has made a international tender to consortiums behind similar projects in London, New York, Chicago and Tokyo.

"Out of six consortiums, three have been preselected," he said, adding the final decision should be made by the end of June. Iran is OPEC's second biggest exporter, with a daily quota of 3.817 million barrels.

http://www.tehrantimes.com/Description.asp?Da=6/9/2004&Cat=9&Num=043



Transit Of Commodities Through Iran Increased By 52%

Tehran: 19:40 , 2004/06/09
TEHRAN June 9 (MNA) -– In the first two months of the current Iranian calendar year (March 20, 2004-March 19, 2005), transit of commodities through Iran hit 1.3465 million tons showing a 52.2 percent increase in comparison with the corresponding period last Iranian year (March 20, 2003-March 19, 2004).
The value of these transited commodities mounted up to $1.3966 billion, which is 4.7 percent higher than the corresponding figure from last year.

During the first two months, the highest transit weight volume was in fuel, while in value the highest transit was in automobiles.

According to reports, the share of foodstuff in transited commodities decreased 6.1 percent in weight while auto and fuel experienced a 1.96 and a 19.6 percent rise in weight volume.

http://www.mehrnews.com/wfNewsDetails_en.aspx?NewsID=85684&t=Economic


GPC - Euro vs US$ in oil
Don Chisholm donchism at magma.ca
Fri Jun 20 16:14:13 EDT 2003


Message: 8
Date: Fri, 20 Jun 2003 11:13:47 +0100
From: "Coilin Nunan" <coilin.nunan at phonecoop.coop>
Subject: Re: Iran bashing and the Euro
Andrew McKillop posted an article saying:
"A significant step in this direction (increasing chances of Euro use by
Mid East oil exporters) is that Iran is contemplating switching to the euro
and, as a result, is the latest object of United States undiplomatic
interference ..."
Iran may have already moved beyond 'contemplating switching to the euro'.
The first article below claims that Iran has already begun selling oil to
Europe for euros. I haven't seen this confirmed anywhere else yet, so would
be interested to hear if anyone else does.
The article also reports that at this weeks meeting of the Asian Clearing
Union (ACU), Iran offered to sell on oil preferential terms to other ACU
members, but wanted them to pay for the oil in euros. The ACU meeting is now
over and the 8 countries involved have agreed to focus on 'payments and
settlements of cross-border transactions in currencies other than US
dollar.' (http://www.thedailystar.net/2003/06/18/d30618050344.htm or similar
at http://www.rediff.com/money/2003/jun/16jalan.htm ).
In other petro-currency developements this week, the Malaysian Prime
Minister was again encouraging moves away from dollar payments for oil. He
was proposing a currency basket of the dollar and the euro to hedge against
currency fluctuations. The hedging mechanism is 'still being worked out'
(see http://www.irna.ir/en/head/030616161245.ehe.shtml or
http://sg.biz.yahoo.com/030616/15/3btjz.html or
http://thestar.com.my/news/story.asp?file=/2003/6/17/nation/sboil&sec=nation
). The second article posted below gives the reaction of the head of the
US' Energy Information Administration to the Malaysian proposal ('I don't
see any particular merit in
that for the average oil producing country' and 'the dollar's always won
out.'), which contrasts very sharply with the reaction of the European
Union's Energy Commissioner which is posted below in the third article ('In
the future the euro is (going to be) taking a place in the international
markets in general as the money of exchange' and 'the role of the euro is
going to be increased step by step' and 'It's a matter of realism').
Cóilín.


http://www.blonnet.com/2003/06/17/stories/2003061702380500.htm
Iran offers oil to Asian union on easier terms
C. Shivkumar
BANGALORE, June 16
IRAN has offered to supply oil to member countries of the Asian Clearing
Union (ACU) on preferential terms in a bid to boost regional trade volumes.
Speaking to Business Line, Dr Mohammed Jaffar Mojarrad, Vice-Governor of the
Iranian Central Bank, said: "We are prepared to supply oil on the same
credit terms as in the ACU." The current mechanism within the ACU provides
for a two-month settlement period. Such a large settlement period acts as
short-duration credit. Currently, oil is traded either in the spot markets
or through forward contracts, though countries like India have some imports
in the form of country contracts.
However, Dr Mojarrad made it clear that Iran would prefer the payments to be
denominated in euros, though invoiced in dollars. In fact, Iran has been in
the forefront on insisting that payments settlements among the ACU member
countries be permitted in alternative currencies including the euro. All
payments settlement between the ACU members is currently done in dollars.
Iran's oil and gas exports destined mostly for Europe are already
denominated in euros. Iran produces about 3.5 barrels and is the second
largest oil exporter among the Organisation of Petroleum Exporting Countries
(OPEC). About 30 per cent of the Iran's oil exports are destined for
European markets. The other two large consumers of Iranian Oil are India and
China. Even in the case of Indian only a small quantum of the oil imports
come through the ACU mechanism.
As a result of the large exports to Europe, Dr Mojarrad said 60 per cent of
Iran's foreign reserves were held in the form of euros. Iran's current
foreign exchange reserves are estimated to be equivalent to $20 billion.
But, he added, the switch to the euro, which was done during the last few
months had helped the country to negate the effects of a depreciating dollar
and falling international oil prices. He said that if the country had
continued its receipts in US dollars, it would have meant large losses,
which would have translated into domestic inflation. This was because large
volumes of its imports are also sourced from Europe. The Iranian central
bank was keen to avert that situation and had consequently adopted the
euro-denominated payments to ensure that the losses were minimised. The
country had also resorted to managing its reserves to minimise the effects
of the depreciating dollar, he added.
Oil prices during the last few months have fallen from a high $34 dollar a
barrel to about $24. Most international oil analysts forecast it to drop
below $ 20 a barrel at current levels of production. However, during the
last one year, the euro has appreciated by over 30 per cent against the US
dollar.
http://sg.biz.yahoo.com/030617/15/3bv0x.html
Tuesday June 17, 3:26 PM
EIA Says Oil Price Switch To Euro From Dollar Unlikely
DJ EIA Says Oil Price Switch To Euro From Dollar Unlikely
KUALA LUMPUR (Dow Jones)--Suggestions that oil trade should be priced in the
euro as well as the dollar were unlikely to be widely accepted, a senior
U.S. Energy Information Administration official said Tuesday.
It was unlikely a recent proposal by Malaysia Prime Minister Mahathir
Mohamad would be taken up by many oil producers, EIA Administrator Guy
Caruso said.
"I don't see any particular merit in that for the average oil producing
country," he said.
"It really is a question of which currency (oil producers) feel most
comfortable with over the long run - and the dollar's always won out."
-By Irene Kwek, Dow Jones Newswires; irene.kwek at dowjones.com

http://biz.yahoo.com/rf/030616/energy_euro_2.html
Reuters
UPDATE - EU says oil could one day be priced in euros
Monday June 16, 6:52 am ET
BRUSSELS, June 16 (Reuters) - The European Union's top energy official said
on Monday she could see the euro replacing the dollar as the main currency
for pricing oil.
"In the future the euro is (going to be) taking a place in the international
markets in general as the money of exchange," European Energy Commissioner
Loyola de Palacio said.
She was reacting to comments made earlier on Monday by Malaysian Prime
Minister Mahathir Mohamad, who said it was time to review the dollar's
energy pricing role.
He said oil producers who bought a lot of European imports would be hard hit
by recent dollar weakness against the euro.
Asked if a switch to pricing oil in euros was possible, De Palacio said: "Of
course -- in the oil market and in any market. "It's a stable and a strong
currency -- the role of the euro is going to be increased step by step --
it's normal," she told reporters after a meeting with U.S. Energy Secretary
Spencer Abraham in Brussels.
She declined to give a time frame within which energy pricing in euros might
begin, but said European Commission President Romano Prodi had raised the
issue on several occasions.
"It's a matter of realism," she said.

http://64.233.167.104/search?q=cache:5AiULMmdmnQJ:lists.envirolink.org/pipermail/gaiapc/2003-June/00....

Update by Cóilín Nunan

At the time this article was written, the suggestion that Iraq’s move to selling oil for euros had something to do with the US threatening war against the country was just a theory. It still is a theory, but a theory which subsequent US actions have done little to dispel: the US has invaded Iraq, installed its own authority to rule the country and as soon as Iraqi oil became available to sell on the world market, it was announced that payment would be in dollars only (1). But the story doesn’t end there: the US trade deficit is still widening and the dollar falling. More and more oil exporters are talking openly about selling their commodity for euros instead of greenbacks. While Indonesia has only been considering it (2), Malaysia’s Prime Minister Dr Mahathir has been strongly encouraging his country’s oil industry to actually do it (3), which has led the European Union’s Energy Commissioner, Loyola de Palacio, to comment that she could see the euro replacing the dollar as the main currency for oil pricing (4). Iran meanwhile has been giving all the signs that it is about to switch to the euro: it has been issuing eurobonds, converting its foreign exchange reserves from dollars to euros and having warm trade negotiations with the EU. According to one recent report it has even started selling its oil to Europe for euros and encouraging Asian customers to pay in euros too (5). Should US talk of ‘regime change’ in Iran not be seen in the light of these facts? The media largely appear to think not since there has been little discussion of the dollar-euro connection with the ‘war on terror’. What discussion there has been may well be expanded upon in the future as neither the threat to the dollar and the US economy or the US threat to world peace are likely to go away any time soon.
http://64.233.167.104/search?q=cache:ayAq3QIQGXAJ:www.projectcensored.org/publications/2004/19.html+....