Denominating Oil Outside of Dollars

Now let me think about this for a second. Assuming oil would be priced in Euros, does that have any long term consequence to the dollar? Probably not, but it could get risky for oil producing countries who wish to sell to the US. Just ask any Japanese or German manufacturer how a declining dollar improves their export business.

Any currency mechanism that makes oil more expensive for the United States, will dampen US demand and have an adverse effect on the world economy. It will accelerate the long term trend, now established, that the US must replace foreign imported oil. A No Dollars Thanks Very Much

greater demand for Euros would place an unwanted burden on European economies which are heavily weighted towards export markets.

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Oil Min: Iran Has Halted Oil Transactions In Dollars -AFP

TEHRAN (AFP)--Major crude producer Iran has completely stopped carrying out its oil transactions in dollars, Oil Minister Gholam Hossein Nozari said on Saturday, labeling the greenback an "unreliable" currency.

"At the moment selling oil in dollars has been completely halted, in line with the

policy of selling crude in non-dollar currencies," Nozari was quoted as saying by the ISNA news agency.

"The dollar is an unreliable currency, considering its devaluation and the oil exporters' losses," he added.

The world's fourth-largest oil exporter, Iran has massively reduced its dependence on the dollar over the past year in the face of U.S. pressures on its financial system.

The U.S. has successfully encouraged major European and Asian banks to cut their dealings with Iran in a bid to make the Islamic republic give way on its controversial nuclear program.

Washington has also blacklisted major Iranian banks for alleged support of terrorism and seeking nuclear weapons, charges denied by Tehran.

Iran has reduced its assets in dollars held in foreign banks and urged OPEC to take collective action to price oil in other currencies such as the euro, instead of the U.S. currency which is used across the world at present.

The decline of the dollar, which has weakened considerably against the euro and other currencies in the past 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the U.S. currency.