[oilbeback]

here is a qoute from a below the radar story i read.

" Beginning in March 2006, the Tehran government has plans to begin competing with New York's NYMEX and London's IPE with respect to international oil trades – using a euro-based international oil-trading mechanism."

has anybody else heard anything about this?
should we worry or will they fail at there venture?

thoughts....coments
open for discussion

[EnergySpin]

I'm C&P from one of own earlier posts today ... but what the heck
$this->bbcode_second_pass_quote('', '$')300-$600 will be the end of it ... However at those price levels and with the depletion well under way, the oil producers will have an incentive to cut back the production to stretch their reserves longer ....
Lets see $300-$600 is about 5-10 times today's price. This would translate to $12.5-$25 per gal. (USA). As long as the cheap credit continues ... this will not be much of a problem. However at those levels, China, EU, Japan might get tempted to pull the plug off the US economy in order to devaluate the US$. OPEC might switch to a basket of currencies to offset their losses and suddenly all the cheap credit in the world would not be able to save the US economy. Even running the military would get prohibitively expensive. A controlled demand destruction triggered by the US (could be a simple tightening of the cheap credit extravaganza) is the only rational way to prevent this scneario from materializing

[energyaddict]

They will not fail with their venture. Iran has a lot of oil and they do not like the US and the USD too much... It is easy for them to require, that all oil deliveries have to be paid in Euro instead of USD. Next step is to negotiate the prices in Euro. The oil bourse trading in Euro is the next logical step.

Other oil suppliers in the region will bring their spot quantities to that bourse, if they see an advantage in doing so. If you look at the development of the Euro against the USD since it was introduced to the markets the advantage of getting Euro instead of USD is obvious....

The time of cheap credit for the US will be over soon. It is likely that additional demand in the future has to be paid in Euro instead of USD - that will require the US to buy Euro instead of printing USD....

[freetoken]

... so also will go the relevance of any bourse they try to set up.

In case you all have missed it, Iranian oil production is declining, their internal need for oil is growing strongly, they have a long simmering civil war growing in their NW (with the Kurds), and their rejection of the EU3 offer wrt nuclear energy will likely lead them to some sort of a confrontation with the US.

As far as economics is concerned, of what value would a prospective "petroeuro" have to an oil producing country? Seems to me a petroeuro would have two uses: (1) as a reserve currency for a small nation whose own currency isn't traded outside of its own borders, and (2) any country whose principal trading partners happen to use the Euro as their own currency. So, of all the oil exporting countries in the world, which would qualify as benefiting from either of the above two uses?

-ft