Cross posted at dkos

The point of this diary? Well I’ve recently found out about the proposed Iranian oil bourse (bourse being the French word for a commodities exchange) and would like to look into how this fits in and how serious the likelihood of it is.

I’m glad to see the number of diaries reflecting on various aspects of the Iran issue are starting to creep up on here, I hope it continues and while I get the sense that the average perception at the moment (of those who are commenting or showing an interest in Iran) is……naaah, never happen, we’ve not got the forces (and I hope you are right)….I think we have to continue to stay informed.

To do our bit to try and avoid a repeat of this 98,000 and this 1,756
But first a bit of

Background

Both Scott Ritter and Seymour Hersh have written recently on the possibility of military action on Iran, Ritter highlighting Israels supposed “point of no return” of the end of June (may explain Sharon waving old photo’s around at Crawford) and Bush having reviewed plans being prepared by the Pentagon to have the military capability in place by June 2005, while Hersh refers to US reconnaissance missions inside Iran.

As realtique pointed out in a diary yesterday, GQ reports this month that the Bush administration has already turned down Iranian offers that may avert military engagement (and I remember another diary on here recently where we were all shocked, shocked I say to find the Bushies had turned down a similar offer from Hussein last time – can’t find that diary now), from the diary:

when Tim Guldimann, then Swiss ambassador to Iran (who served as the link between the United States and Iran), came to Washington in the spring of 2003, he brought with him a possible offer from Tehran–a “grand bargain” in which the United States would open relations with Iran and, in return, Iran would give up its nuclear-enrichment program. “The Pentagon and the National Security Council learned about it,” the State Department official told me. “There was no hashing this out. They said, `No, no discussion on this.’ That was it.”

Additionally, stoy diaried on the Bolton angle, picking up on an Al Jazeera piece opining that Bolton is being sent to the UN to attempt to force a change in the NPT, from that diary:

Once the US has withdrawn from NPT under the cover of Bolton’s smoke screen, the Rove spin machine will further capitalize on the ground work done by Bolton’s shrieking about the ease of which nations, like oh, I don’t know, Iran, can violate the Treaty and get away with it.  Then the mighty Wurlitzer will be playing Wham Bamb Bomb Tehran.

and as stoy pleasantly puts it there are plenty of “galactic assholes” in waiting if Bolton fails to get nominated.

Finally Michael Klare’s excellent piece entitled Oil, Geopolitics, and the Coming War with Iran shows the role Irans oil and natural gas supplies have to play vis-a-vis Iran opening up further trading relations with China, India, Pakistan and Japan

Iranian Oil Bourse

But what none of the above have dealt with is the prospect of Iran opening it’s own oil bourse.

At present the majority, if not all, world oil trade is denominated in the mighty dollar, which means any country wishing to trade in oil must hold US dollar reserves which in turn helps to prop up the mighty dollar.

And it’s traded on exchanges such as the IPE (London) and the NYMEX, both of which are owned by US corporations. The IPE one including BP, Goldman Sachs and Morgan Stanley.

However what appears to be a little known fact (correct me if I’m wrong) is that in November 2000 Saddam Hussein commenced trading oil in Euros and its thought in some quarters that this was one of the major reasons for the invasion.  Post invasion (you know, post “mission accomplished”) Iraq’s oil was mysteriously reverted to trading in dollars.

In June 2004 Iran announced it was looking into setting up it’s own oil bourse for launch by March 2005.

Obviously that hasn’t happened.

However in September last year Iran announced it would be operational by March 2006

The consequences of oil being traded in Euros on an Iranian bourse? Well according to this piece from Arab Media Internet network last month

But if Iran – followed by the other oil-producing countries – offered to accept the Euro as another choice for oil exchange the American economy would suffer a real crisis

and according to this excellent piece this month from altpressonline

The first casualty would be the dollar, according to an article in The Atlanta Journal Constitution, some experts fear that the dollar could possibly suffer as much as a 40% drop in value.  

(Unfortunately I can’t find the AJC piece)

So to get to my point in writing this, I know there are plenty of people posting on here with a far better understanding of the machinations of the international oil industry than me and I’m just inviting comments on whether this proposed oil bourse is a serious proposition and what it’s likelihood of success are. Meantime I’ll keep reading.

And if it does turn out to be serious I’d bet

a) It wont garner much attention in the mainstream media.

b) It would be one of a series of useful arguments we on the left are going to have to frame if and when the current sabre rattling starts to achieve it’s aim and the administration needs to start scaring the general public into another war.