"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

09 December 2006

Iran Selling Oil in Euros, Where's the Iran Oil Xchg?

Iran May Reduce Use of Dollar, Tehran Papers Say
By Marc Wolfensberger

Dec. 6 (Bloomberg) -- Iran, the world's fourth-largest oil exporter, plans to reduce its use of the U.S. dollar in world trade and increase use of the euro, two Tehran-based newspapers reported. The Tehran Times said today Iran has started substituting euros for dollars in oil sales, citing an unidentified person at the Oil Ministry. Iran Daily reported Iran wants to cut its dollar-based transactions to a minimum, citing Minister of Economy Davoud Danesh-Ja'fari.

Iran's oil export contracts for months have included a clause that allows the nation to seek payment in the euro and other currencies, creating a mechanism for a switch should Iran's policy change, according to traders who buy Iranian oil. Iran has repeatedly said it would limit dollar-based transactions following the U.S. decision in September to block one of Iran's biggest state-owned lenders from doing business with the U.S. The U.S. Treasury on Sept. 8 blocked Bank Saderat for its alleged support of ``terrorist organizations'' such as Lebanon's Hezbollah movement and Hamas in the Palestinian territories.

Iran exports 60 percent of its crude to Asia, 32 percent to Europe and 8 percent to Africa. It is the world's fourth-largest exporter of crude and OPEC's second-biggest member. The nation last month produced 3.76 million barrels a day, according to data compiled by Bloomberg.

And Russ Winter pointed out that last week's record dollar support came from the Middle East, NOT Asia. "The last week has brought on some real stress in the asset backed securities market. A thinking person would naturally ask why this hasn’t spread to equity and other markets? The answer is no particular surprise, foreign central banks (FCBs) rode in with an enormous and record one week $16.8 billion infusion of Treasury and housing agency purchases. This unsustainable 'hail Mary pass' illustrates in spades why the Middle East is critical to the US Ponzi finance and energy dependent scheme. If you are pinning your triumph of hopes on it, pray hard (facing Mecca) for the stability of Saudi Arabia, Kuwait, Bahrain, Oman, Qatar, and the UAE.


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