Translated material
Undermine the dollar
Iran threatens America with the creation of its own oil exchange with settlements in euros
Iran yesterday officially announced that on February 27 it will launch an exchange on which contracts for the sale of oil, petroleum products and gas will be traded. According to RIA Novosti, Oil Minister Golam Hossein Nozari stated this on the local Press TV channel. According to him, “the solemn opening ceremony of the oil exchange will be attended by Iranian Minister of Economy Davoud Danesh Jafari, who will become its head.” It is declared that settlements at the exchange will be carried out in Iranian rials, but it is possible that in euros. The platform itself will open on the island of Kish in the Persian Gulf - in a free economic zone where foreigners can come without visas and where there is almost no taxation. These circumstances, as the organizers of the site assume, will contribute to the interest of traders. It is planned that in two to three months all Iranian oil will be exported. will necessarily be sold on the stock exchange. However, experts are cautious about such ideas: it is absolutely unclear what the trading conditions and advantages will be and whether they will be able to cover the risks, especially the risk of working in a country that is in opposition to America.Iran, the second largest oil producer in the world after Saudi Arabia and the third largest in terms of its reserves, has been puzzled by the creation of a commodity exchange for a very long time. Back in 2002-2003, the eternal opponent of the United States planned to strike at the dollar (since oil contracts are traded in American currency on all commodity exchanges) and organize trading in the euro. However, the experience of Iraq, according to experts, stopped the leadership of the neighboring country: as is known, Saddam Hussein also planned to abandon dollar payments and sell oil for euros, he even managed to transfer part of the contracts under the Oil for Food program to European currency. This circumstance further aggravated the confrontation with the United States, and Iran then chose not to provoke a conflict.
In 2004, Tehran returned to the issue of creating an exchange. Then a site was chosen on Kish Island and even an approximate date for its launch was set. However, the deadlines were constantly postponed, and as a result it has not yet been created. In 2006, the country's President Mahmoud Ahmadinejad once again proclaimed the course of creating an exchange and now seems ready to bring it to life.
As Rajab Safarov, general director of the Center for the Study of Modern Iran, told Vremya Novostei, in the coming months Tehran plans to privatize almost all oil companies (43 of them), while the new owners will be required to work only with traders who have passed re-registration. And upon re-registration, traders will be required to sell all oil on the exchange for euros or Iranian rials. According to experts, some European traders are already negotiating the creation of a joint venture with Iranian structures. “Iran sells $70 billion worth of oil every year,” says Mr. Safarov, “and if this volume falls out of the global economy, it will deal a significant blow to the dominance of the American currency in the world.”
At the same time, the expert rejects the assumption that there may not be buyers for oil for the euro. The fact is, he says, that demand for Iranian (and not only Iranian) oil often exceeds supply, and other oil-producing countries will not be able to compensate for the volume of Iranian exports. And even if they try to increase production, at least in OPEC this will be considered a violation of export quotas. In addition, countries such as Japan and Spain will not be able to replace Iranian raw materials due to technical reasons. And it is more profitable for European countries to buy oil in euros, the expert believes, because they do not have to spend money several times on foreign exchange transactions and depend on exchange rates.
In the first two or three months, according to Mr. Safarov, only petrochemical products will be sold on the exchange - the system will be “tested” on them. And only then will oil trading begin. According to the terms of trading, it is stipulated that the price will be lower than on other world platforms, but if it falls by more than 10% relative to the world average for a specific hour, then trading on that day will be suspended. “Yes, the country will lose money if the price on the stock exchange is lower,” agrees Mr. Safarov, “but these losses will be compensated by the strengthening of the euro and the Iranian national currency.”
However, whether Iran will be able to implement all these plans is an open question. After all, it is obvious that the intention to create a commodity exchange is more about politics than economics. Therefore, a reaction from the United States is quite possible, which could theoretically force Tehran to abandon such plans. And in OPEC, disagreements may arise in connection with such an initiative - after all, it may entail some reduction in world oil prices, and this is not part of the cartel’s plans. In addition, many purchasing companies may not want to cooperate with Iran in this form, fearing sanctions from the United States or the European Union, and will demand additional supplies from other OPEC members and changes in quotas, which will provoke another conflict within this organization.
The United States is seeking the European Union to increase pressure on Iran over its nuclear program by banning two Iranian banks from operating on European soil, The Financial Times wrote on Wednesday. The British publication notes that the plan to take action against Saderat and Melli was supported by Paris and London. However, since none of these banks are the target of UN action, Germany, Italy and other European states still oppose EU action to ban Saderat and Melli, which Washington claims are involved in terrorist financing and nuclear proliferation. ", the newspaper notes. “The United States believes that tougher EU sanctions will put pressure on other countries with large amounts of business in Iran, such as China, to curtail business relations,” the publication said. The Financial Times quotes an unnamed US diplomat as telling the newspaper: "We will push the EU to go further (on sanctions against Iran) than the UN Security Council." INTERFAX-AFI