Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Will OPEC Dump the Dollar? [Our Arab Oil Giants "friends"]
businessweek ^ | 11/21/07

Posted on 11/22/2007 9:14:37 AM PST by PRePublic

Will OPEC Dump the Dollar?

BusinessWeek

Iran is pushing OPEC to shift away from pricing oil in dollars and instead to a basket of currencies that could include the euro. ...

http://www.businessweek.com/globalbiz/content/nov2007/gb20071120_087338.htm?chan=globalbiz_europe+index+page_companies

(Excerpt) Read more at businessweek.com ...


TOPICS: News/Current Events
KEYWORDS: antiamericanism; arabs; bahrain; dollar; energy; lobby; muslims; oil; oillobby; oman; opec; qatar; reservecurrency; saudiarabia; uae
Navigation: use the links below to view more comments.
first 1-5051-60 next last
Can anyone explain to me what on earth gave Bush the idea that the Suadi Arabians are our friends? because it was not the "maginficent" 19 Saudi 911 Hijackers...
1 posted on 11/22/2007 9:14:39 AM PST by PRePublic
[ Post Reply | Private Reply | View Replies]

To: All

iran refuses to rule out oil as weapon http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=2&article_id=86871


2 posted on 11/22/2007 9:19:42 AM PST by PRePublic (Islamic Hamas kidnapped Johnston & then "freed" him)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PRePublic

Who on earth ever thought of the Saudis as anything but business partners? Or, in the case of Israel, not even that.


3 posted on 11/22/2007 9:21:38 AM PST by RightWhale (anti-razors are pro-life)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PRePublic

This is why we need to stop being stupid and start drilling our own oil. If we get into an all out war someday and need more oil, we can just go take it. Where is the will to survive that this country use to have? Where are our leaders that actually believe in this country? Seems to me all we have left today are the power hungry Clintons.


4 posted on 11/22/2007 9:22:40 AM PST by RC2
[ Post Reply | Private Reply | To 2 | View Replies]

To: PRePublic
I dunno . . . Lemme guess:

He enjoys his private visits with Saudi diplomats?
Millions in under the table campaign donations?
Perhaps those rumored secret accounts in Dubai are real?
How many of the high jackers were Saudis?
Maybe Alex Jones is correct about 9-11 being an 'inside job?'

Haaaah ! Heaven Forbid! Just rumors. Dirty political mud slinging. Nothing to see here. Time to move on.

5 posted on 11/22/2007 9:24:37 AM PST by ex-Texan (Matthew 7: 1 - 6)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PRePublic

I thought we were dealing w/the Saudis before President Bush?? The dollar is collapsing so they want to be paid in something more stable, no surprise.

Happy Thanksgiving to Our Troops


6 posted on 11/22/2007 9:27:06 AM PST by bray (Think "Betray U.S." Think Democrat)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PRePublic
Countries do what is in their own national interst.

Why would the Saudis want to be paid in collapsing dollars?


7 posted on 11/22/2007 9:28:09 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PRePublic
How long would the euro last as a 'safe' reserve currency if the United States closed all of its bases in, and withdrew all of its forces from, European countries?

"Come to Vladimir, my European sheep, er, friends!"

8 posted on 11/22/2007 9:28:52 AM PST by snarks_when_bored
[ Post Reply | Private Reply | To 1 | View Replies]

To: PRePublic

You think the stock market has been jittery lately? Just wait until OPEC demands payment in EUROS. Then you are really going to see the market tank.


9 posted on 11/22/2007 9:29:14 AM PST by Uncle Hal
[ Post Reply | Private Reply | To 1 | View Replies]

To: Hydroshock

Econoping.


10 posted on 11/22/2007 9:30:12 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
[ Post Reply | Private Reply | To 1 | View Replies]

To: RightWhale

Put yourself in their shoes. All the oil is bought in dollars...so they get billions of dollars per week. To buy ANY other currency...you get raked over the coals...so you are really stuck...you have to buy with dollars only...so where do you shop? Think about that for a second. The Saudis and the rest of these guys are mad as heck for a good reason...they have to buy US services, US products, US expertise...etc. If they would really like to chat with the French....well...its a 25 percent difference on standard pricing.

The Europeans? They are stuck having to buy cheap dollars for their oil...which makes them really happy currently about “cheap” oil...compared to what a US consumer is paying. But selling stuff to the US? It just won’t work....too much cost.

Chinese unhappy? Yep. They get paid for all those US products...in dollars. They can shop the dollars for oil...but thats about all they can do. They can’t readily European products because the cost difference is so lousy.

Yes, there are people upset by the slumping dollar...but think about why they are upset. Maybe this situation isn’t as bad as people think.


11 posted on 11/22/2007 9:31:09 AM PST by pepsionice
[ Post Reply | Private Reply | To 3 | View Replies]

To: snarks_when_bored

Let the Euros (and Koreans) defend themselves. It’s not 1952, they are plenty rich enough to pay for the military they need.


12 posted on 11/22/2007 9:32:00 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
[ Post Reply | Private Reply | To 8 | View Replies]

To: pepsionice

The exchange rate is adjusted every hour of every day. What species of currency they use at any time is immaterial.


13 posted on 11/22/2007 9:32:39 AM PST by RightWhale (anti-razors are pro-life)
[ Post Reply | Private Reply | To 11 | View Replies]

To: Travis McGee
I've thought for quite a while that the United States should offer all European countries that are home to U.S. bases and/or troops the following deal: pay all expenses associated with the presence of our military in your countries (in a timely manner and without haggling or resentment), or else prepare to defend yourselves within one year.
14 posted on 11/22/2007 9:36:19 AM PST by snarks_when_bored
[ Post Reply | Private Reply | To 12 | View Replies]

To: Travis McGee

When the shiite hits the fan, they’ll all want dollars. All these guys have Swiss accounts for a getaway. Do you think they are denominated in Euros?
I hope so.
I hate to say this but I see only two alternatives to World War; kill Chavez, and drill here.


15 posted on 11/22/2007 9:43:38 AM PST by steve8714 (The last actor elected POTUS turned out OK.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: Travis McGee
Every time I think I understand the cost of oil, I realize .. I don't understand Jack Schmidt !

Here's how I (very childishly, I suppose) understand it.

A driller (Saudi, Chavez .. whatever) needs x amount to pay the workers and have some profit.

( the cost of drilling, equipment, etc. is not in this equation now)

So, a figure is fixed to pump the oil and pay the people (shippers etc.)

So what happens? .. Does a memo come down, "Yo, Achmed ... the Americans think you should be getting x+$5 instead of x ... they "figured this out" a year ago"

Achmed says, "Cool"

And oil is now x+$5 ... until the next memo comes down?

16 posted on 11/22/2007 9:44:31 AM PST by knarf (I say things that are true ... I have no proof ... but they're true.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: PRePublic

I think any currency goes through cycles. Eventually, we will need to employ the tools available to stop the dollar slide. The last time this happened, and it was worse, James Earl Carter was at the helm. The correction was a true struggle as well.


17 posted on 11/22/2007 9:44:41 AM PST by stevem
[ Post Reply | Private Reply | To 1 | View Replies]

To: bray
Happy Thanksgiving to Our Troops My best wishes of 'Happy Thanksgiving' to the troops With all my heart!
18 posted on 11/22/2007 9:46:02 AM PST by PRePublic (Islamic Hamas kidnapped Johnston & then "freed" him)
[ Post Reply | Private Reply | To 6 | View Replies]

To: knarf
For a moment I thought you were referring to Achmed the dead terrorist...
http://www.youtube.com/watch?v=1uwOL4rB-go

Never mind...

19 posted on 11/22/2007 9:48:53 AM PST by PRePublic (Islamic Hamas kidnapped Johnston & then "freed" him)
[ Post Reply | Private Reply | To 16 | View Replies]

To: RightWhale
The exchange rate is adjusted every hour of every day. What species of currency they use at any time is immaterial.

So, accordingly, any nation can exchange any amount of any currency into any other currency every hour, with no loss to any side at all? Is that how it really works?

20 posted on 11/22/2007 10:06:47 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
[ Post Reply | Private Reply | To 13 | View Replies]

To: snarks_when_bored

Ain’t gonna happen.


21 posted on 11/22/2007 10:07:15 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
[ Post Reply | Private Reply | To 14 | View Replies]

To: steve8714
When the shiite hits the fan, they’ll all want dollars.

What makes you think they'll want a currency that is going over Niagara Falls in value?

22 posted on 11/22/2007 10:08:08 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
[ Post Reply | Private Reply | To 15 | View Replies]

To: pepsionice

You also forget that the economies of France and Germany are not on the most stable footing, either. That right there threatens the Euro, since the economies of these two countries more or less props up the currency.


23 posted on 11/22/2007 10:16:57 AM PST by RayChuang88
[ Post Reply | Private Reply | To 11 | View Replies]

To: Travis McGee

Actually currency is only a medium of exchange and is converted into other entities right away. Nobody but Scrooge McDuck keeps currency around beyond walking around money.


24 posted on 11/22/2007 10:17:06 AM PST by RightWhale (anti-razors are pro-life)
[ Post Reply | Private Reply | To 20 | View Replies]

To: knarf
( the cost of drilling, equipment, etc. is not in this equation now)

That is a mistake. Oil fields are not magic holes that flow forever. An oil company that wants to maintain their level of production must keep drilling. And rates for rigs, equipment and material are skyrocketing.

That is part of what got us in trouble in the first place. Exploration and Production was scaled way back from the late 90's when oil prices dropped so low. Very little was done to provide the oil we need today. The surplus production capacity fell very low and made the market more susceptible to upsets and speculation.

For the last few years, oil companies have been doing major exploration and expansions of facilities. But it takes a while to catch up, especially with a continued growing demand.

25 posted on 11/22/2007 10:19:39 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 16 | View Replies]

To: Travis McGee
Beware the ''one-way'' market thinking. C$ has moved from 92 cents to 57 cents to $1.10 in 30-odd years. Sterling has moved from $2.40 to $1.01 to $2.10 in 45 years. In just 8 years, Euro has moved from $1.17 to 82 cents to $1.47.

Currencies, all throughout history, have run in cycles. This will repeat itself yet once more in the next decade or so. Also note that USD tends strongly to firm up under a 'Rat administration and to soften up when a Pubbie is in office.

The subprime ''crisis'' will be done with by this time next year, if not sooner. Banks **always** shoot themselves in the foot, about once a decade. Sovereign loans in the 1970s, S&L fiasco-cum-fraud in the 1980s, hugely overcapitalising the 'Asian Tigers' in the 1990s, the list goes on.

26 posted on 11/22/2007 10:21:52 AM PST by SAJ
[ Post Reply | Private Reply | To 22 | View Replies]

To: Travis McGee

no oil will not be traded in euros soon. simple because the EU has no interesst in a financial doomed USA.


27 posted on 11/22/2007 10:38:39 AM PST by austrian
[ Post Reply | Private Reply | To 22 | View Replies]

To: PRePublic

This is probably way off but by crashing the US dollar’s value won’t that help to garner broader support to develop a North American Union with one currency. A Larger picture Ploy?


28 posted on 11/22/2007 10:41:59 AM PST by drypowder
[ Post Reply | Private Reply | To 1 | View Replies]

To: Travis McGee
Ain’t gonna happen.

Correct. Too damned bad...

29 posted on 11/22/2007 10:47:04 AM PST by snarks_when_bored
[ Post Reply | Private Reply | To 21 | View Replies]

To: austrian
no oil will not be traded in euros soon.

Some already has.

Iran acts on non-dollar oil transactions
http://www.presstv.ir/detail.aspx?id=31812&sectionid=351020102

On the macroeconomic level, close to all of our oil transactions are being conducted in non-dollar currencies, the official said, adding, "Less than 20% of the transactions is being done in the Japanese currency, yen, while the payments for the rest are being made in the EU currency, euro."

In further clarification of the subject, Ghanimifard pointed out that currently the National Iranian Oil Company (NIOC) was receiving more than 80% of the payments for its oil exports in non-dollar currencies.

30 posted on 11/22/2007 10:52:31 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 27 | View Replies]

To: thackney

And meanwhile, Congress wants to block drilling practically anywhere and everywhere.


31 posted on 11/22/2007 10:54:01 AM PST by Tolerance Sucks Rocks (Repeal the Terrible Two - the 16th and 17th Amendments. Sink LOST! Stop SPP!)
[ Post Reply | Private Reply | To 25 | View Replies]

To: Tolerance Sucks Rocks

Yep, we don’t have a lack of resources, we have a lack of will to use them.


32 posted on 11/22/2007 10:55:16 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 31 | View Replies]

To: austrian

“oil will not be traded in euros soon. simple because the EU has no interesst in a financial doomed USA.”

I would not write the obituary for the U.S. economy just yet. Neither EU, nor any other country, is in any position to get into the driver’s seat.


33 posted on 11/22/2007 11:00:38 AM PST by Poison Pill
[ Post Reply | Private Reply | To 27 | View Replies]

To: knarf

Wrong, the price of oil is determined by the futures traders. That started in 1983 and is the bane of the oil industry. OPEC can influence it by adjusting production up or down, depending where they want the price to settle.

There is an estimated $10-15 premium now on pricing as a result of political unrest world wide. So oil would be about $80/barrel if Imanutjob and Chavez weren’t rattling their cages.

The oil companies would like nothing better than a 50-60 dollar stable price range on prices. They could make long range plans and stabilize their operations. Now it is feast or famine as it takes years to gear up once a bust hits and equipment is mothballed and people leave the industry. Hell, the last bust that hit the industry resulted in a lot of drilling equipment being sold for scrap. Chopped up and probably sent to China to be recycled.


34 posted on 11/22/2007 11:10:57 AM PST by biff
[ Post Reply | Private Reply | To 16 | View Replies]

To: RightWhale
What species of currency they use at any time is immaterial.

It will not be immaterial when China, India, Japan, EU and US dump dollars to buy Euros.

Your dollar will look like the peso.

35 posted on 11/22/2007 11:16:53 AM PST by trumandogz (Hunter Thompson 2008)
[ Post Reply | Private Reply | To 13 | View Replies]

To: Tolerance Sucks Rocks

if ANWR were to come on line next week, we would still be importing OPEC Oil.


36 posted on 11/22/2007 11:18:37 AM PST by trumandogz (Hunter Thompson 2008)
[ Post Reply | Private Reply | To 31 | View Replies]

To: biff
be kind to a simple mind ... how does it work?

OPEC decides to stop drilling or lowers production, futures traders see this, get nervous and ... then what?

37 posted on 11/22/2007 11:21:19 AM PST by knarf (I say things that are true ... I have no proof ... but they're true.)
[ Post Reply | Private Reply | To 34 | View Replies]

To: Poison Pill

I would not write the obituary for the U.S. economy just yet. Neither EU, nor any other country, is in any position to get into the driver’s seat.


as i said this will not happen. but not because
this could not be possible (theoretically). just imagine the whole world dumping its dollars while buying euros. the dollar would collapse and the euro would rise. this would mean this would soon double or triple your costs to import
your oil while the rest of the world would get it for the usuall price. this would really be a blow to your current life. but most countries are not interessted in such a scenario because it would hurt them too (not that much it would hurt the US ,but why would any one want to lose money or lower his current life standart?) because where do we want to sell our products?


38 posted on 11/22/2007 11:30:04 AM PST by austrian
[ Post Reply | Private Reply | To 33 | View Replies]

To: thackney

Some already has.

Iran acts on non-dollar oil transactions
http://www.presstv.ir/detail.aspx?id=31812&sectionid=351020102

On the macroeconomic level, close to all of our oil transactions are being conducted in non-dollar currencies, the official said, adding, “Less than 20% of the transactions is being done in the Japanese currency, yen, while the payments for the rest are being made in the EU currency, euro.”


but this has no effect for the US. Since america doesn´t import iranian oil. EU is Iran biggest customer so iranian oil traded in euros is good for EU but not real bad for the USA. it only would be bad if all opec states would refuse to take dollars for their oil. this would be a disaster for the dollar and the Usa. But this will not happen because most countries are not interessted in a collapsing dollar.
not because they do love the Usa that much, but because of
simple selfish buisness interessts.


39 posted on 11/22/2007 11:30:09 AM PST by austrian
[ Post Reply | Private Reply | To 30 | View Replies]

To: knarf

Their bidding for the futures contracts goes up.

In the U.S. the futures are traded at the NY Merchantile Exchange. A bunch of guys in the pit trying to bid on what they think the future price of oil will be based on many theories. Of course, almost all of them never take physical possession of the oil they are bidding on. They just sell their contract and whattaya know, they make a profit. It is a scam placed upon the American consumer by the big money houses on Wall Street.

There are two ways oil is placed on the market for sale. The futures traders and the contract buyers. Let’s say you got an oil well out in Texas and you wanna sell your oil. You can either place it on the futures market and take you chances or you can sign a contract with a local “collector”. The contract price generally runs anywhere from 2 to 6 bucks less than the futures price. You might not make as much per barrel but it is guaranteed price and they will take it every day, week, month, etc. The contract methond is what most producers use as it is safer and you don’t have to worry from day to day or month to month how you are going to get rid of your oil.


40 posted on 11/22/2007 11:34:52 AM PST by biff
[ Post Reply | Private Reply | To 37 | View Replies]

To: Travis McGee

lets not forget this happened with the yen in the 1980’s.

less buying power with the dollar hurts their ability to do harm in the world.

Also keep in mind the euro of the EU has never been able to “balance” in their accounting. In fact they have been rocked by two scandals and the second scandal was glossed over because the new laws enacted after the first accounting scandal were supposed to stop the second scandal. Essentially business as usual.

You also have to consider the USA is the ecconomy for business.

The USA is not number one by accident. In many other contries, a contract dispute never favors the foreign investor. They get hometowned routinely.


41 posted on 11/22/2007 11:36:58 AM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
[ Post Reply | Private Reply | To 7 | View Replies]

To: PRePublic

“Can anyone explain to me what on earth gave Bush the idea that the Suadi Arabians are our friends?”

It is the same nebulous thinking that makes him claim that Islam is a ROP. Get used to it.


42 posted on 11/22/2007 11:37:34 AM PST by 353FMG (Hillary - Al Qaeda's Choice)
[ Post Reply | Private Reply | To 1 | View Replies]

To: 353FMG; PRePublic

Nations have no “friends.” They have alliances based on mutual interests and/or necessity. To give a nation human traits is childish.


43 posted on 11/22/2007 11:40:34 AM PST by durasell (!)
[ Post Reply | Private Reply | To 42 | View Replies]

To: durasell

“They have alliances based on mutual interests and/or necessity.”

Whose interests and whose necessities? The Saudis or ours? Ever since WWII we have only considered the interests of other nations and during the process given our nation away. And don’t tell me that we are stronger today than we were on August 14, 1945.


44 posted on 11/22/2007 11:50:50 AM PST by 353FMG (Hillary - Al Qaeda's Choice)
[ Post Reply | Private Reply | To 43 | View Replies]

To: durasell
Nations have no “friends.” They have alliances based on mutual interests and/or necessity.

Looks like you read the first sentence of the first paragraph of a textbook for Introduction to International Relations.

Unfortunately, most others have not.

45 posted on 11/22/2007 11:52:36 AM PST by trumandogz (Hunter Thompson 2008)
[ Post Reply | Private Reply | To 43 | View Replies]

To: austrian

“as i said this will not happen. but not because
this could not be possible”

Anything can happen. But it usually doesn’t. Countries hold dollars because it is in their best interest. If you had a boat load of dollars would you sell them all cheap by trading for expensive euros? No. Those dollars will eventually come back to the US when dollar holders start buying dollar denominated assets that are priced cheap.(Remember when the Japanese were gobbling up U.S. real estate in the 80s?) That is why Dubai investors wanted the US ports and why they are buying banks now. In time the dollar will rise and the whole cycle will start over.


46 posted on 11/22/2007 12:03:11 PM PST by Poison Pill
[ Post Reply | Private Reply | To 38 | View Replies]

To: 353FMG

Whose interests and whose necessities? The Saudis or ours?


A) Again mutual interests.

B) Almost immediately following WWII the world entered into the Cold War. Do you believe that was a fight not worth fighting?


47 posted on 11/22/2007 12:04:14 PM PST by durasell (!)
[ Post Reply | Private Reply | To 44 | View Replies]

To: trumandogz

Never said we wouldn’t. However, I still support opening ANWR.


48 posted on 11/22/2007 12:06:25 PM PST by Tolerance Sucks Rocks (Repeal the Terrible Two - the 16th and 17th Amendments. Sink LOST! Stop SPP!)
[ Post Reply | Private Reply | To 36 | View Replies]

To: Travis McGee

As always, when the world gets into trouble, the rich will look for an island of stability. The dollar has been overvalued for some time, particularly against the yuan.
What they think is trash today they will want tomorrow. This has happened before, no?


49 posted on 11/22/2007 12:43:39 PM PST by steve8714 (The last actor elected POTUS turned out OK.)
[ Post Reply | Private Reply | To 22 | View Replies]

To: trumandogz
if ANWR were to come on line next week, we would still be importing OPEC Oil.

If ANWR was only the first step to the rest of NPRA, Bristol Bay, all of our coast lines, OCS followed by Oil Shale and coal-to-liquids, we wouldn't need to import from OPEC in our lifetime.

50 posted on 11/22/2007 1:14:50 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 36 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-60 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson