Been Here Before?

Iran, whilst not causing problems over seizing marines and sailors, is encouraging oil importers to pay for their crude in currencies other than the US dollar, such as euros. I've mentioned before that the US administration fell out with Saddam Hussein because he became troublesome over the euro vis-a-vis oil. Are we heading for a similar showdown with Iran?

Probably not is the answer. The US is in a bind over this. They could get Saddam because he was depicted as a monster with WMD. Iran is a different kettle of fish. They are not so easy to portray as the bad boys. The US only just got backing for this struggle in Iraq, and then the UN vote was seen as being something for everyone to believe in - either it was legal or it wasn't - that was the end result.

This new euro-for-oil enterprise will see the Americans watching from the sidelines. The French and Germans will have little or no interest in protecting the dollar. China and India will see the euro as being vaguely similar to the dollar. It may lead to the US negotiating with Iran, but the US is not going to see the dominance of the petro-dollar continue in the 21st Century as much as it did in the last.

And it may usher in a new thinking in the world, where oil is just another fuel alongside others, and our reliance on it is no longer as crucial. But that will mean the USA standing on its own and not relying on the rest of the world spending dollars only!

Posted in: Iraq