The Deep Breath Before the Plunge

Iranian President Mahmoud Ahmadinejad just announced that starting this July, Iran will stop trading oil for dollars. Instead, anyone who wants to buy oil from Iran will have to pay for it in euros

In related news, Russian President Vladimir Putin has announced a similar plan: he is calling for Russia to establish an oil exchange denominated in rubles. Depending on how Russia is prepared to go in its requirements for selling oil, this could prove far more damaging to the global market for petrodollars.

This may be just the opportunity that oil importing countries, particularly Europe, need to diversify their foreign currency holdings away from the US dollar, which currently dominates the global oil trade.

Raise the Hammer