Iran stops selling oil in dollars

[Gordo]

This has been threatened but now it has happened.

Iran stops selling oil in U.S. dollars

Sat Dec 8, 2007 10:10am GMT - Reuters
TEHRAN (Reuters) - Iran has completely stopped selling any of its oil for U.S. dollars, an Iranian news agency reported on Saturday, citing the oil minister of the world's fourth-largest crude producer.
The ISNA news agency did not give a direct quote from Oil Minister Gholamhossein Nozari. A senior oil official last month said "nearly all" of Iran's crude oil sales were now being paid for in non-U.S. currencies.
For nearly two years, OPEC's second biggest producer has been reducing its exposure to the dollar, saying the weak U.S. currency is eroding its purchasing power.
Iranian President Mahmoud Ahmadinejad, who often rails against the West, has called the U.S. currency a "worthless piece of paper."
Foes since Iran's 1979 Islamic revolution, Tehran and Washington are also at odds over Tehran's disputed nuclear programme as well as over policy in Iraq.
"In line with the policy of selling crude oil in currencies other than the U.S. dollar, currently the sale of our country's oil in U.S. dollars has been completely eliminated," ISNA reported after talking with Nozari.
Nozari told ISNA: "In regards to the decrease in the dollar's value and the loss exporters of crude oil have endured from this trend, the dollar is no longer a reliable currency."
"This is why, at the meeting of the heads of states, Iran proposed to OPEC members that a currency (for oil exports) would be determined that would be reliable and would not cause any loss to exporter countries," he said.
At a November summit of Organization of the Petroleum Exporting Countries heads of state, Iran suggested oil should be sold in a basket of currencies rather than dollars, but failed to win over other members except Venezuela. Continued...

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[rj1]

Re: Iran stops selling oil in dollars

What countries buy oil from Iran?

[GRG55]

Re: Iran stops selling oil in dollars

What countries buy oil from Iran?

Japan has historically been Iran's largest customer, usually taking one-quarter to one-third of liftings. China, France and Italy are the next 3 largest customers.

[zoog]

Re: Iran stops selling oil in dollars

What countries buy oil from Iran?

From http://www.eia.doe.gov/emeu/cabs/Iran/Oil.html

According to International Energy Agency’s Monthly Oil Data Service and Global Trade Atlas, Iran’s net crude and product exports in 2006 averaged 2.5 million bbl/d, primarily to Japan, China, India, South Korea, Italy, and other Organization for Economic Co-operation and Development (OECD) nations, making it the fourth-largest exporter of crude oil in the world. In 2006, Iran’s oil export revenues amounted to $54 billion.

[Rajiv]

Re: Iran stops selling oil in dollars

From Iran oil exports at risk in UK ship sanctions plan

Iran, OPEC’s second largest producer, pumps 3.85 million barrels of crude a day and exports 2.4 million barrels of that on tankers by sea, with about 60 percent bound for Asia and the remainder shipped to Europe.
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“The main lifters are Japanese, Indian, Chinese, South Korean. A small amount goes to southern Europe,”

From Iran presses oil customers to pay in currencies other than dollars

Japanese refiners, who buy about 500,000 barrels per day of Iranian crude, nearly a quarter of Iran's 2.2-million barrel daily shipments
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Iran is a leading oil supplier for China, with daily volume of 335,000 barrels last year.

[Gordo]

Re: Iran stops selling oil in dollars

It cannot be a coincidence that Iran stopped accepting dollars on the same day this contract was signed with China.

TEHRAN (Reuters) December 9 - Iran signed a contract with China's Sinopec on Sunday for the development of the country's huge Yadavaran oil field, the kind of energy deal the United States has been trying to prevent.

[The Outback Oracle]

Re: Iran stops selling oil in dollars

Well, if I was one of those countries buying a lot of oil from Iran, I'd sure be trying to swap a lot of USD for something while I could ??????

[GRG55]

Re: Iran stops selling oil in dollars

It cannot be a coincidence that Iran stopped accepting dollars on the same day this contract was signed with China.

TEHRAN (Reuters) December 9 - Iran signed a contract with China's Sinopec on Sunday for the development of the country's huge Yadavaran oil field, the kind of energy deal the United States has been trying to prevent.

Could be a "barter" style offset agreement, as the Chinese would prefer to pay in US $, and paying in yuan would be quite problematic for international commodity purchases. This is a way for the Chinese govt. contractors to source inputs in US $ for the field development, and take oil in kind as payment.

Neither the Chinese nor the Indians see Iran as a reliable energy supplier. This is a way to try to improve that security of supply by managing and operating the field directly during the contract term. As a govt-to-govt deal, the chances of future abrogation of the contract are minimized. It helps a great deal that the Chinese won't interfere with internal Iranian politics, as long as their oil flows. The Indian govt, which has stronger ties to the USA, is struggling with these issues, as it would also like to maintain a "non-aligned" political stance, and deal with anyone and everyone commercially just like their great rival, China.

[Gordo]

Re: Iran stops selling oil in dollars

How to punish Iran for jettisoning the dollar i.e. war, embargo, or otherwise?

Possible Scenarios.

War is out because of the no-nuke report.

Embargo is out because of the China deal.

That leaves only one viable and effective option - lower the price of oil and reduce Iran's income from $54 billion a year to about 1/2.

Any punishment must be swift for the same reason you must spank a dog as soon as possible after he messes.

This means they must open the oil spigots and fill up those high priced tankers with oil as soon as possible.

Could mean........$60 oil by January.

[dbarberic]

Re: Iran stops selling oil in dollars

Well, that would explain why Bush is still pursuing Iran even after they have stopped nuclear development in 2003. The enemy of the state is now anyone who does not accept the USD as the world's reserve currency.

[Guest]

Re: Iran stops selling oil in dollars

Gordo -

I see you making several posts which seek to validate your short term investment hypothesis. This is is at some level, equivalent to 'telling the market what it should do'. I reiterate, if you score the big one I'll be out here telling you that your sheer cold nerve entitled you to the grand reward, and you'll have my best wishes. You did not ask me, but I'll suggest to you today to do the opposite.

Rather than read articles everywhere substantiating your position, read all the articles questioning your position instead, and test your conviction against them. You are in a quite large short term bet. Testing your hypothesis by looking continually at reasons why you could be wrong is the hard-headed way to fine-tune your decisions. There is a 'lost opportunity' factor in the money you are prepared to burn on this bet as well as merely the money itself. You can task the major part of that money to some high probability bets today, just as well.

There are several very high probability bets lying around at the present time. One of them is that oil will double in the next three to four years, which means with a scrap of patience you can double your money with very little worry.

[Mega]

Re: Iran stops selling oil in dollars

Yes Luke, but does that mean Gold will double as well?
Mega

[Guest]

Re: Iran stops selling oil in dollars

Miker - of course. Gold is the laggard. Gold and Petroleum are inextricably linked. Anyone who tells you the relationship between the two is 'hypothetical' or 'intermittent' is in my view overwhelmingly likely to be incorrect within five to seven years.

Between gold and oil, oil has been the flat-out leader. Gold is the 'cheap value play' compared to oil, and if oil is going to $200 USD you can hitch a very easy ride alongside owning gold instead.

Silver is so cheap it's regarded as practically dirt in this environment. It's got a dual bid - both industrial and as the second "former" monetary metal. It's unpredictable, but if you own gold you need to 'spice' that position with silver. Cheap and strategically placed for a coming oil shortage, silver is a very, very good position on the 'chess board' to own if you are on-board with a terminal end-game playing out in petroleum within our lifetimes.

I welcome anyone here pointing out to me where the above analysis is coming to seriously incorrect conclusions.

[BlackVoid]

Re: Iran stops selling oil in dollars

How to punish Iran for jettisoning the dollar i.e. war, embargo, or otherwise?

Possible Scenarios.


This means they must open the oil spigots and fill up those high priced tankers with oil as soon as possible.

Could mean........$60 oil by January.

There are no spigots to open.

[BlackVoid]

Re: Iran stops selling oil in dollars

I agree with Lukester's point of view fully.

As for the question: gold or oil?
Do you have a large oil tank in your backyard? Yes? Then fill it up. If not, buy physical metal for at least 20% of your savings.
Paper is just paper, many many times in history it reached its intrinsic value (0).

Gold doubling? I think not. It will go much higher than that.

Besides, do you know that gold production has peaked and production is just about entering a steep downward slope?
Look at this:
http://news.goldseek.com/GoldSeek/1145804580.php

If Peak Oil does not happen, gold will still be good. Chinese love gold. Indians love gold. Gold production has peaked. Central banks are running out. It may be a barbarous relic, but the Chinese do not think that way.