Iranian Oil Bourse Update

In March 2006, you had an article about LEAP’s prediction if Iran stops selling its oil in U.S. currency and switches to Euros. Today on al-Jazeera’s Web site, they have an article about Iran finally making the decision to stop accepting U.S. Currency.

Q. In March 2006, you had an article about LEAP’s prediction if Iran stops selling its oil in U.S. currency and switches to Euros. Today on al-Jazeera’s Web site, they have an article about Iran finally making the decision to stop accepting U.S. Currency.

A. In the year since that article the dollar has lost substantial ground against the Euro and is now trading at a two year low (according to Forex). On top of that the Euro has become the world’s pre-eminent currency in international bond markets, displacing the dollar for the first time in history.

This change was brought about in part by Iran’s progressive move away from dollar denominated trading for its oil, breaking the monopoly previously held by the dollar. Since they began this move late last year Iran has already reduced its level of dollar denominated oil sales to less than 50% of the total.

The latest move by Iran in the economic area is to propose joining up with Russia and Qatar in forming an OPEC style cartel for natural gas. Together they control over 50% of the world’s reserves. This one could take a while, but there appears to be serious talk about it.