NO! THIS is the MOST terrifying article I have ever read..OIL BOURSE

[serryjw]

quote.......
To protect its economy US has no choice but to strike Iran. The administration is creating incidents around the world to incite hostility towards Iran in order to enlist European nations into its strike. Fear of nuclear radical Iran is spread through the media. Religious clashes between Christians and Muslims have been carefully planned and executed through European media, who insist on their “freedom of self expression” by insulting the Islamic prophet through their caricatures with their full knowledge that such caricatures inflame Muslims sentiments. Since last September 143 papers in 56 countries have published these insulting caricatures. Violence against foreign embassies in Arab countries had been carefully executed. Terrorist attacks against Shiites and Sunni mosques and clerics in Iraq had been conducted by special forces to incite civil war. A major terrorist attack will take place against one of the European countries, probably Denmark or Italy. The West would accuse radical Islamic Iran of the attack, and use the attack for a justification of a strike.

The plan is for American, British, and Israeli air forces to launch heavy air raids against Iranian defenses, nuclear facilities and of course Iran Oil Bourse. Under the cover and the protection of these air forces European troops would invade and control Iran’s Khuzestan Province located southwest of Iran and bordering Iraq and the Persian Gulf. This is the same province that Iraq tried to occupy during its 1980 – 1988 war against Iran. Khuzestan is the richest part of Iran. It contains Iran’s major oil field; the Yadavaran field. It also has large refineries, chemical plants, petrochemical and steel industries, pipe making factories, Iran’s petroleum reserve, and major electrical power stations on Karun 3, Karun 4, and Karkhen dams.

The US expects this invasion to take less than 100 days. To avoid the expected oil crisis due to the shut-off of Iranian oil the American administration is planning to use its strategic petroleum reserve that has a supply of oil equals to about 175 days worth of Iranian production
end quote......

Is there anything going on in Congress OR is King George going IN w/o Congressional approval?
http://www.amin.org/eng/uncat/2006/mar/mar5-0.html

[sinkingfeeling]

1. Yes, it's terrifying and also the stupidest plan in history.

[NMDemDist2]

2. we've discussed this in the energy forum and there's a lot on it in the

economics forum

it's very frightening indeed as we know this guys are all about $$$$$

[MadMaddie]

3. This is the same reason that's been floating around about

why the US attacked Iraq....

Iran would destroy the oil fields before they would let America have access to it...and don't think for a minute that all of the countries surrounding Iran won't come to their defense...

The repugs think they want a WWIII that won't touch American soil.....they are sadly mistaken...the world will turn against America...

[TomInTib]

4. 100 days? kinda like "5 months, tops"?... If it even takes twice ...

that long it will be a disaster.

Our strategic reserve would be drained never to be refilled.

Global demand is barely being met as it is.

[Name removed]

5. Deleted message

Message removed by moderator. Click here to review the message board rules.

[TomInTib]

11. An Iran will switch to petro euros in late March...

and we absolutely will not allow that.

[0007]

47. More on that link

Also, Israeli acting Prime Minister Ehud Olmert stated that Iran would pay "a very heavy price" if the Islamic Republic defiantly resumes full-scale uranium enrichment to build nuclear weapons.

Zhirinovsky told the Russian radio station that, "The war is inevitable because the Americans want this war. Any country claiming a leading position in the world will need to wage wars. Otherwise it will simply not be able to retain its leading position."

"The date for the strike is already known — it is the election day in Israel (March 28). It is also known how much that war will cost,” said Zhirinovsky.



Commenting on the Muslim riots sweeping the Middle East and Europe, Zhirinovsky (pictured above) said that the publication of the offensive cartoons was a planned psyop on the part of the US and aimed to “provoke a row between Europe and the Islamic world”.

“It will all end with European countries thanking the United States and paying, and giving soldiers,” said Zhirinovsky.

[raccoon]

66. Can you give us that link? That message was deleted. nt

[0007]

70. I'm sorry as hell. I see what I can come up with, if I can think

of where I got it.

[RaleighNCDUer]

16. It'll be refilled.

We just have to invade Venezuela to do it.

[mom cat]

48. 100 days plus chocolate and roses. No the plan is to level Iran in 100

days. I am sure that is why the helicopter gunships have been sent to Iraq.

[magellan]

6. Congress have already voted to send Iran to the UN Security Council

It's an Iraq redux almost down to the letter (replace Q with N), and yet those who should know better this time (Dems) are playing along like they haven't seen the pap this maladministration is selling them before. Ignorant or complicit? Either excuse is intolerable.

[Hardrada]

52. This is maybe the only way most Americans will discover

that they are different countries.

[LibertyorDeath]

56. LOL...I'd laugh harder if it wasn't so true.

"This is maybe the only way most Americans will discover that they are different countries."

[Pachamama]

58. And finally learn their geography?

Sadly, no joke.... :eyes:

[leeroysphitz]

68. IMO, complicit. God help us. n/t

[Fridays Child]

7. We are way more f'ed than we know, if this writer's assessment is correct.

[Fridays Child]

8. k/r

[peacebird]

9. Russia and China have signed agreements with Iran and will come to

their aid in the event we attack.

Our troops in Iraq will be slaughtered. Israel will be targetted for retaliation as well.

But nonetheless I believe bushco will attack pretty much as laid out in this article. After all - in the past two days we've heard that Iran is supplying weapons to Iraq insurgents and Iran is trying to destabilize Iraq. Obviously we must stop Iran.
:sarcasm:

100 days - walk in the park - they'll welcome us as liberators - the middle east will become a garden of democracy... :sarcasm:

[tularetom]

10. What scares me is that these assholes can't do ANYTHING right

How anybody in congress could even think of supporting an Iran invsasion after the way they've fucked up Iraq is beyond me. Aside from the sheer immorality of thousands of dead civilians, the chances are pretty good that the whole operation will be botched (think Iraq, Katrina, Social Security, Medicare, the economy, the deficit etc. etc). These fuckups are not the kind of people who should be allowed to make critical foreign policy decisions involving war and peace. It's time to put the grownups back in charge. In the meantime, keep your gas tank full. I have a feeling the strateggic petroleum reserve will be depleted way before oil begins to flow from the middle east again.

[TrogL]

59. Because they want to bring on the Rapture in their lifetimes

[Frank Cannon]

69. No way. These guys are less religious than Alistair Crowley.

They USE religious BS to fluff up their base, but that is the absolute end of their spiritual commitment. I'm pretty sure that behind closed doors they laugh at all the Rapture idiots who support them.

No, the neocons are the worst of nihilists. They are pretty sure that the world is pretty much used up, that there are just a few priceless pickings left to grab in order for them to dominate EVERYTHING and ensure their rule for eternity over whatever dregs of human life are left. And so they're making a desperate play to grab it ALL in the short time they have left.

[tocqueville]

12. I don't buy the cartoon story 5 s

facts talk against the theory of "planting" the cartoons since those cartoons have circulated in Arab newspapers at least 5 months before the riots without causing any major outrage...

the bombing of the mosks in Iraq complicate the US task and doesn't facilitate it. If you want to invade Iran, you'd rather not have a 10 millions angry Shiites roaring at your back...

What has most infuriated the Europeans is the fact that the Irani prime has several times not only denied Israel right to exist, but even openly threatened to destroy it. But the Dear Doctor merely states "Israelis are trying to persecute him in German courts as a holocaust denier"....

on the other hand it's clear that the US administration want to strike at Iran and some of the reasons quoted sound accurate. But mixing them with fantasies doesn't make them more credible...

[stillcool]

17. ECONOMIC ANALYSIS: Scandiarabia

by Fred Cederholm

Norway’s role in the international oil market is about to increase. On Tuesday, Feb. 21, 2006, 192 additional exploration lease parcels of the Norwegian North Sea fields were offered for sale--the largest such sale in over 40 years.I’ve been thinking about “Scandiarabia.” Actually I’ve been thinking about Scandinavia, Hans Blix, the Jyllands-Posten cartoons, Norwegian oil, Sven Arild Andersen, and the US Dollar. While the images of snow-capped mountains, reindeer, and stable political democracies of the Scandinavian countries are a far cry from the images of arid geography, camels, and questionable stability of the oligarchies of the Arabian Peninsula; there are clear links.
You see, Scandinavian connections figure predominantly in the unfolding drama of the present war/instability in the Middle East—and have been so since before the US invasion of Iraq on March 19, 2003. The significance of these “Scandiarabia” factors cannot be downplayed. Two of these links (with ongoing ramifications) have already transpired. One more link between these regions is about to unfold in the coming weeks. It will hit with a bang, not a whimper.

The publication of twelve comic representations of the central figures of Islam by the Danish newspaper Jyllands-Posten, and their re-publication globally, has triggered worldwide riots and other acts of violence. Are they “directly” responsible for the past week’s bombings and intra-Islam conflicts in Iraq? It is impossible to say, but they certainly did not help the situation. Iraq is now on the brink of all-out civil war, and the “light at the end of the tunnel” is looking more and more like an on-coming train.

On Dec. 27th, 2005, it was published (in Norwegian) that Swen Arild Andersen, the Director of the Norwegian (energy) Bourse, would pursue an expanded role for their exchange in the trading of Norway’s oil, and that the transactions would be denominated in EUROs. Andersen stated: "We have performed market studies and both Russia, which is a large oil exporter, as well as the countries of the Middle East, have large parts of their economies in Euros. They would be able to view such a bourse as a contribution to balancing their economies in a better manner than at present, where their products are traded solely in dollars."

Accepting the EURO for oil sales was begun by Saddam Hussein of Iraq in December 2002. Chavez of Venezuela has since followed suit. Now it is Iran, Norway, and—Ka-Ching, Ka-Ching, Ka-Ching: OUCH!The Norwegian article was not translated and re-published in English until Feb 22, 2006, and this development comes on the back of the already much publicized Iranian Energy Bourse scheduled to commence trading oil, gas, and petro-chemical (in EUROs) on March 20, 2006. The largest mandated use of the US dollar (up until now) has been for the purchase of oil. Accepting the EURO for oil sales was begun by Saddam Hussein of Iraq in December 2002. Chavez of Venezuela has since followed suit. Now, it is Iran, Norway, and—Ka-Ching, Ka-Ching, Ka-Ching: OUCH!

http://baltimorechronicle.com/2006/030206Cederholm.shtml

[tocqueville]

21. Norway isn't Denmark

besides Norway isn't even a member of the EU... The Scandinavian economies are sound, but a trifle compared to the big major economies...

I'd like to have explained why :

far "worse" cartoons (because the Danish ones were mostly harmless even to average religious Muslims) have circulated before in many magazines through Europe without causing any major outrage

the cartoons were published in mainstream Egyptians newspapers in october 2005 without causing outrage

why should the US "inflame" the passions among Muslims before attacking one of their major nations ? The tactics against Saddam were to isolate him (which worked pretty well) not causing sympathy for him before invading...

all this doesn't make sense. What makes sense is that some threatened countries like Iran and Syria have all advantage to inflame the masses in the Muslim world to make very difficult for the US to maintain its presence there. What if Dubai, Quatar etc or even the Saudis, Egypt... were so outraged that they told the US to fuck off ? Look at Pakistan : not only they are outraged but Junior told them no nukes, but for your neighbour and arch-rival, it's OK...

NO need of cartoons for that. If they haven't existed, the Iranians had invented them...

[stillcool]

29. well....yes....I can read too....

Norway isn't Denmark?...WTF? I'm really sorry you didn't care for the article.....try this one....

CIA operations follow the same recurring script. First, American business interests abroad are threatened by a popular or democratically elected leader. The people support their leader because he intends to conduct land reform, strengthen unions, redistribute wealth, nationalize foreign-owned industry, and regulate business to protect workers, consumers and the environment. So, on behalf of American business, and often with their help, the CIA mobilizes the opposition. First it identifies right-wing groups within the country (usually the military), and offers them a deal: "We'll put you in power if you maintain a favorable business climate for us." The Agency then hires, trains and works with them to overthrow the existing government (usually a democracy). It uses every trick in the book: propaganda, stuffed ballot boxes, purchased elections, extortion, blackmail, sexual intrigue, false stories about opponents in the local media, infiltration and disruption of opposing political parties, kidnapping, beating, torture, intimidation, economic sabotage, death squads and even assassination. These efforts culminate in a military coup, which installs a right-wing dictator. The CIA trains the dictator’s security apparatus to crack down on the traditional enemies of big business, using interrogation, torture and murder. The victims are said to be "communists," but almost always they are just peasants, liberals, moderates, labor union leaders, political opponents and advocates of free speech and democracy. Widespread human rights abuses follow.

This scenario has been repeated so many times that the CIA actually teaches it in a special school, the notorious "School of the Americas." (It opened in Panama but later moved to Fort Benning, Georgia.) Critics have nicknamed it the "School of the Dictators" and "School of the Assassins." Here, the CIA trains Latin American military officers how to conduct coups, including the use of interrogation, torture and murder

http://www.aliveness.com/kangaroo/CIAtimeline.html
or this one.....
http://www.killinghope.org /

Following its bombing of Yugoslavia in 1999, the United States wound up with military bases in Kosovo, Albania, Bulgaria, Macedonia, Hungary, Bosnia and Croatia.
Following its bombing of Afghanistan in 2001-2, the United States wound up with military bases in Afghanistan, Pakistan, Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Georgia, Yemen and Djibouti.
Following its bombing and invasion of Iraq in 2003, the United States wound up with Iraq.
This is not very subtle foreign policy. Certainly not covert. The men who run the American Empire are not easily embarrassed.
And that's the way the empire grows -- a base in every region, ready to be mobilized to put down any threat to imperial rule, real or imagined. Sixty years after World War II ended, the United States still has major bases in Germany and Japan; fifty-two years after the end of the Korean War, tens of thousands of American armed forces continue to be stationed in South Korea

....or watch Wolf Blitzer...

[tocqueville]

35. I watch Euronews

and what has above to do with the cartoons ?

the fact that the CIA disrupts regimes it doesn't like goes back to its creation. Nothing new. But pissing off your potential allies or neutrals in the region before launching an attack doesn't make sense. The cartoons plays in the hands of the CIAs enemies, why give them that chance ?

A more reasonable explanation is that IN DEFENSE against CIA's illegal interventions some are using the cartoons to make the CIA's disrupting task more difficult.

If you want to overthrow Iran, why create the risk of a general intifada in the countries that could at least provide you with a logistic support ?

as I said above there are so many obvious facts pointing at the need of the current administration to launch a new war that nobody needs another conspiracy theory.

[stillcool]

39. the reason why I posted the links....

is because there is a pattern of behavior, that not very many are familiar with.....otherwise....we wouldn't be here. The publishing of those cartoons at this time surely was meant to bring the reaction it did. I have no idea who benefits from this...or who is responsible...the underlying facts will undoubtedly suface and reveal the logic underneath it all. Or not. "Human-rights atrocities", and "Civil War", are notable excuses for intervention.

[tocqueville]

45. I can agree with that

but in the current situation nobody in the West is interested in a civil war in the ME. Iraq is enough problems.
If I wanted to start a coup in Iran (the primary target), I'll use the liberal middle-class, who cannot stand the Mollahs. "Civil-war" interventions are OK in countries like a small south-american republics, Darfur, Kosovo, Ivory Coast etc... etc... I don't see that pattern on Iran, more the classic WMD in 45 minutes trick.

Besides the CIA has been quite successfull in peaceful regime changes like Ukraine and had a botched attempt in Uzbekistan. The attempts in Syria-Lebanon are not that succesfull and have only reinforced the Hamas.

My theory about the cartoons is that in the event it was a planned attempt (difficult to believe since most of the papers reproducing them in Europe were not very conservative papers), it was an attempt to see how the Muslims masses in Europe would react. But if it was the case, it was a big fiasco. The riots in France were completely areligious and when the cartoon controversy broke out (2 months after), most of European muslims didn't give a damn, except the most religious ones. On the contrary the local clerics were the first to discuss freedom of expression contra blasphemy and racism and told "their" masses to keep quiet. The biggest (peaceful)protest reached 10 000 participants which is very low by European standards. There were no violent events, except the murder of a priest in Turkey, which the Vatican toned down very rapidly.

It's interesting to note that the first riots broke out on the Gaza strip and Syria, and were tolerated by secular elements that normally fought religious extremism. Or Maybe Arafat's guys and Syrian Baathists turn religious when old ? very, very strange...

[mogster]

30. One should note

That the plans for a bourse trading in Euros in Norway was put forward as a suggestion, not an actual plan. The CEO Sven Arild Andersen is now retired, and this proposal was done during one of the last interviews he gave.

But still, this is interesting.
It was I that translated that article and sent it to the energybulletin people after finding it at the pages of the Norw. broadcasting corp., NRK. Just that day there was a debate about the Hussein-Chavez-Iran connection through their oil bourses, but as far as I heard they failed to mention the Norwegian proposal. The article in question is here:
http://nrk.no/nyheter/okonomi/5346557.html

I googled, but no other reports of that bourse exists. Wonder if he knew what possible dynamite he was proposing? He doesn't seem to have a clue.
The article doesn't give away any afterthoughts, it just says 'plans have been discussed for a year, but never got past talking stage'.

I'm not sure this has anything to do with the cartoons. I'm digging into that and will be back with a report. It's already looking very interesting ;-)

[stillcool]

34. wow...thanks for that....

I did a little googling myself and found an article from the 3rd...but it just mentioned his replacement...http://www.norwaypost.no/cgi-bin/norwaypost/imaker?id=22552

Major leadership change in Aker Group
Financier and business magnate Kjell Inge Roekke has stepped down as chairman of the board of the Aker Group. He will be replaced by Aker Kværner board chairman Leif-Arne Langoey. Roekke will remain as ordinary member of the board until the Group's annual meeting on March 30th

[mogster]

53. No, this is two different people

Not connected.
Well, both are doing business in Norway, but that's all ;-)

[tocqueville]

42. the right in Norway has always wanted to join the EU

and the Euro. Since 92 and before. Norway idn't join the EU for pure chauvinistic reasons, where the arguments of not joining "the club" were bought by the population to the difference from Sweden and Finland (Denmark was already a member), even if there were backlashes regarding the Euro in Sweden and Denmark later. This is nothing new.

Fact is that the non-euro countries in Scandinavia are facing long term problems with their valutas floating around the Euro. I noticed that when Swedish friends visited me this year and found out that 5 euros are pocket money here and 50 crowns (the equivalent) "still 50 crowns". It's more difficult for an average Swede to take vacations in the South of Europe and - complete horror - even Spain is too expensive...

Besides I don't understand what Hussein-Chavez-Iran connection they are talking about, more than in virtual terms. Hussein was half-dead before the Euro even started (2001), Chavez barely elected (1999) and the Mollahs were at that time having a non-confrontational policy against the west and very happy to have Saddam removed.

That nowadays there is a connection between Chavez and the new Iranian leadership, yes. And that it is perceived as a threat by the US, yes. Countries like France, Germany, Spain etc.. and the Scandinavian countries are probably interested in counterbalancing the petro-dollar, the Chinese too. But nobody is interested in making the US economy collapse (except the Iranians). You don't kill your customers.

[mogster]

54. One part chauvinist, one part union-phobia

Norway was in union with Denmark for four hundred years, it's called the four hundred years night here. Then we had hundred years of union with Sweden. We didn't get our independence until 1905.
In both unions, Norway was treated as a colony with limited freedom, and I think that's a part of why we said no to join the union.

> Countries like France, Germany, Spain etc.. and the Scandinavian countries are probably interested in counterbalancing the petro-dollar, the Chinese too. But nobody is interested in making the US economy collapse

I agree. This may be why the proposal never came past the talking stage. But I'm not sure if these bourses are what they're claimed to be, in being dangerous for the US economy. Is the effect of switching to Euros that bad?
Btw, it's not only the right that wants Norway to join the EU, it's a cross political view that usually split parties in two fractions. One of the pro-European parties are the current governing Labour party, where most of the leadership are pro.

[muriel_volestrangler]

13. I don't know where he gets this from

To maintain the purchasing power of any currency its value must be backed by gold. The American Dollar is the exception to this rule. The Dollar is a fiat currency backed only by oil trade that uses only Dollar as its currency.

No major currencies are now backed by gold. They are traded against each other; the currency markets determine their value, based on their expectations of future movements in the market, but with underlying driving forces of expectations of interest rates, ability of the government to repay its debts, and other aspects of a country's economy. The oil trade does not back the dollar; look how much the oil price in dollars changed over the past couple of years (considerably more than in euros). Countries do have to hold some dollars for oil trading, but it's dwarfed by the amount of dollars, euros, yen and everything else traded each day in the currency markets.

[mogster]

31. Good point

It would be interesting to know more about this, I don't have a clue when it comes to economy.

[RaleighNCDUer]

14. Read earlier today (don't have the link) that Gen. Casey is claiming

that Iranian Revolutionary Guard are infiltrating Iraq to attack Iraqi security forces. By extension, that means the Iranians are attacking us. That means we have to hit them back.

Right?

[Earth_First]

27. I caught this on Al Franken this afternoon...

and I thought to myself the same thing, NCevilDUer...

[McKenzie]

15. I have been following this for a while now - link

the Bourse is probably the real threat and not only to the US. Creditor nations of the US have a lot to lose if the dollar tanks given that their dollar reserves would be rendered worthless. I'm not sure how that would impact upon China or Russia though. A bit of research on that issue would be worth pursuing because it might explain why Russia, in particular, is fostering relationships with Iran knowing that the economic fallout could crash the US and other western economies.

I hope to hell it won't happen but the economic threat of a move away from dollars as de facto reserve currency will pull the rug from under the feet of those nations that depend upon maintenance of the financial status quo. So maybe it's war or bust.

We are between a rock and a hard place.

http://www.scoop.co.nz/stories/HL0602/S00157.htm

[peacetalksforall]

18. Any adult, responsible person sitting in a think tank or a WH round

table or the Pentagon can figure out that attacking Iran could go horribly wrong, especially economically. What guarantee is there that the dollar will be saved by bombing the hell out of Iran and pulling off another attempt to invade and takeover? To proceed means that our own people are out to destroy our country and Israel/Palestine.

What cutie slogan are they going to come up with to parallel 'shock and awe' and will it come from the old or new testament?

No more death. No more disturbed minds. No more missing limbs and organs. No more ruined families. No more ruined immune systems. No more ruined careers and businesses. No more. No more.

[IndyOp]

19. serryjw - Do you think Bushco will wait until after Nov elections?

Afraid that an attack will put people off voting GOP? The longer the wait, the less likely it will happen, IMO.

:shrug:

[serryjw]

37. I wouldn't bet on it

the damage is to great. He will go in in the next 30 days(IMHO)

[RaleighNCDUer]

50. But we aren't going to attack them.

They are going to attack us, and the nation will rise in righteous fury and demand we strike back at the perfidous Iranians, uniting behind the president just before the elections.

Any takers?

[serryjw]

51. I think they are too smart to fall for this

Just my opinion, no basis

[RaleighNCDUer]

62. They are going to attack us

the way the Poles attacked Germany in '39.

The way the Sunnis attacked the Golden Mosque.

They won't know a thing about it until after they did it, and we've retaliated.

[serryjw]

63. The problem is

I DON'T think the Sunnis attacked the Golden Mosque

[RaleighNCDUer]

65. To clarify

I don't think so either. Just as the Poles did not start WW2. And the Iranians, no matter what the Pres and his lapdog press say, will not attack us.

[Roland99]

20. It's more than just the Oil Bourse >>>>>>>>>>>

Disaster in the making
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=598209&mesg_id=598209

[Donailin]

22. Sorry but this has been completely debunked.

http://www.dailykos.com/story/2006/2/24/74940/5678

Let me kill off once and for all the Iranian oil bourse story
by Jerome a Paris
Fri Feb 24, 2006 at 07:49:40 AM EST
Crazy scenarios involving Iran's purported attempts to create an oil bourse to start selling oil in euros make the rounds regularly, and even get recommended with alacrity on DKos.

These things WILL NOT HAPPEN, and we have, as a supposedly reality-based community, to focus on real issues and not imaginary ones.

So let me explain why an Iranian oil bourse will not work for the foreseeable future. I hope that this diary can be used as a handy reference when this crops up again in the future.

Jerome a Paris's diary :: ::
Here are some basic facts about what a "bourse" is:


it's a place for sellers and buyers for a given product to meet. So, as a seller, you want a place where buyers come and, as a buyer, you want a place where sellers come. It's a meeting point.
A meeting point is a form of conventional information, and one that is highly stable once established. People come to the market because they know that others will be there as well, and these are there for the same reason. Once players have agreed to come to one place, it is simpler to come to that place than to try and organise a new place, which everybody must agree to and which all occasional players need to be informed of. Just like DKos is now THE main meeting place for the progressives, the existing oil bourses have an massive advantage over any new one in that they already exist. London has remained the main trading place for a surprising number of commodities despite the British Empire being long gone and the US having replaced it as the largest economy - simply because the infrasturcture was there, and the people with the competences to play there were still around. Windows is unassailable on desktops despite being obviously inferior in quality to some alternatives, simply because there is a real advantage for everybody to use a common standard, even if it imperfect. A bourse is a standard on where and how to trade.

There is no compelling reason to move from London or New-York to Iran to trade oil. Iran only has 5% of world production and is in no position to impose anything. Network effects paly massively agaisnt a switch.


it's a place that allows a price to be set for the transaction. That means that you want many buyers if you're a seller, and many sellers, if you are a buyer. It provides liquidity.
This is linked to the above point: liquidity exists when you have a deep market, i.e. many buyers and many sellers. That comes from having a place where everybody comes, and a place that everybody trusts because it works. "Don't fix it if it ain't broke" applies here. Again, this is a compelling argument against Iran. Iran can potentially act as a seller, but would will ensure that there are buyers on that particular market?


the other item related to price is that a bourse needs to provide a single price to act as a universal reference for everybody - a market standard, both in terms of the quality of the product, and the currency it is expressed in. This allows for historical data to be expressed consistently, and for market players to have useful references and background to do their trades.
For oil, that currency is and has always been dollar, as a widely stable, universally accepted monetary unit. There is no market and no liquidity in any other currency. It is at least conceivable that the euro could be used as it is similarly stable and acceptable to all, but it has no history as an oil trading currency, and thus market players would naturally convert any price in euro into a price in dollars to see what it means (try switching from degrees Celsius to Farhenheit or from centimeters to inches to know why this matters). Again, there would need to be an overwhelming reason to force all market players to make the switch (and to do it all at the same time), which Iran does not provide.


a bourse is a place that provides security for the transactions. Buyers know that they will get their purchase delivered, and sellers know that they will get paid in a timely fashion. It provides clearing mechanisms.
Do you expect other producers to rely on Iran to ensure timely payment of their sales? Do you intent to rely on Iran, an untested bourse, to be responsible for delivery by other parties?


it's a place that provides rules and enforcement of these rules for the proper functioning of the market, i.e all the above: who can participate, how prices are formed, how the clearing is organised, and how disputes are settled. It needs to be a neutral arbiter, uninvolved in the actual trading.
Again, this plays against Iran, who is too small a player to impose rules to all, but too big to be seen as a neutral player by other sellers. And do you really want to take the risk that the religious authorities in the background or any other Iranian politician come and start meddling with the ongoing trades?


as rules will ultimately be set by public authorities overseeing the bourse, and disputes will ultimately be decided by courts of that place, it needs a consistent regulatory and legal framework.
There's a reason why most commodity bourses are in Western countries. They provide the rule of law, a predictable set of rules, and a capacity to enforce these rules in an effective and market-neutral way. and they have a long track record of doing so. Iran? Not so much.


in today's world, a bourse is essentially a big IT operation, with systems able to provide complete market information to all participants in real times, treat operations as they are decided, and provide an unambiguous audit trail to all interested parties to a transaction.
Again, that requires a lot of specialised competences on the ground: programmers, developpers, consultants to install them, the specialist hardware providers, etc... all people that need some (or a lot) of understanding of what's going on in the market. That's highly specialised knowledge, which is, naturally concentrated in the few places that carry bourses, i.e. a few large cities in the West. Iran will be hard pressed to attract such people to Tehran or thereabouts.


finally, the oil bourse is only a small part of the trading that goes on around oil. Most of what takes place are financial transactions: spot sales, forward sales, swaps, various hedging instruments, short term financing, long term financings. All these transactions rely on the underlying oil market, and significantly expand it. If you take out the oil market, or change its rules, standards, references, clearing mechanisms and enforcers, you kill the associated financial markets, which are vital to the world economy and underpin a large chunk of our industrial activity and energy needs.
Do you really expect the financial markets to move to Tehran, which has neither the infrastructure, the competences, the legal framework or the stability to host them? Even a switch to the euro would need a massive reorganisation of the financial markets, which are exclusively geared to dollar transactions. This only amplifies the arguments made above about the sole oil market with respect to liquidity, standards and the like. And the legal and regulatory questions are even more important. Do you really want billions of euros of daily financial flows to be ultimately controlled by the Iranian Central Bank? It would basically take the outright destruction of the existing markets to provide any incentive to try to rebuild them differently, and Tehran would not be their first pick to do it...


:: ::

So, say that Iran decides to sell its oil in euros. Fine. Both the Iranians and their clients will determine the price for the transaction in dollars, on one of the established markets, and will trade these dollars for euros for the actual payment operation. It will give banks active on the forex markets a little bit of income, but will change nothing to how oil is traded.

If they open a bourse, who will come? The answer is, no one, unless it is nothing more than the new place to buy oil from them and the transaction, whether in euros or in any other currency, will be negotiated in dollars, using existing market standards expressed in dollars, because there is no way that anybody will be able to express and clear the transaction in any other way.

:: ::

So please, let's stop the fantaisies, or the conspiracy theories about a switch to euros or a new bourse. If any transaction, whether by Saddam, the Iranians or anyone else is expressed in euros, it is purely cosmetic. The underlying market is in dollars, and will remain that way.

We are badly undermining the credibility of the site by recommending silly scaremongering stories on that topic.

Jerome is the last word on all things energy related at KOS. You may want to consider subscribing to his diaries to keep better informed.

[Roland99]

24. Seems to me he's assuming Iran isn't working up something with China

and Venezuela.

[Turn CO Blue]

25. Beat me to it! See post # 23 n/t

[serryjw]

32. Sorry, but that is REALLY a stupid article

I wouldn't hold my breathe that he has a clue what he is talking about. You may go down with the Titanic

[Donailin]

38. it's not an article

it's a diary. New to the internet. . ?

[muriel_volestrangler]

41. He understands how oil and currency are traded

which is more than the guy who wrote the article in the OP seems to. Professional economists don't think the Iranian oil bourse is important politically, eg http://www.antiwar.com/blog/comments.php?id=P2643_0_1_0

[serryjw]

44. Sorry, but that simply isn't true

Is that WHY US is stop publishing our M3 a coincidence? Be careful to take bloggers as gospel. To much has been written about the Iran bourse and the US falling dollar by reputable sources. * wouldn't be beating the ar drum if this wasn't a concern.
quote.....
I'm not enough of an economist to be able to predict the impact on the removal of the dollar as the sole currency for the purchase of oil, but there are plenty of experts who predict some pretty scary things, the least of which is a massive destabilization of the American economy.

What's interesting is that plenty of people will tell you that Iran's bourse is of no threat, and not even financially viable. This however reminds me of a Radio Free Europe story on Saddam Hussein's move back in 2000:


Iraq is going ahead with its plans to stop using the U.S. dollar in its oil business in spite of warnings the move makes no financial sense.

Baghdad this week insisted on and received UN approval to sell oil through the oil-for-food program for euros only after 6 November. Iraq had threatened to suspend all oil exports -- about 5 percent of the world's total -- if the body turned down the request.

The move comes despite repeated cautions that Baghdad's departure from the oil industry standard of the dollar will cost the country millions in currency conversion fees. UN officials have said Iraq will have to reduce the price of its crude oil by about 10 cents a barrel in order to compensate buyers for the additional costs.


But Saddam Hussein profited handsomely on the conversion, especially because the Euro rose approximately 17% in value. The Euro, which at the time was 82 cents to the dollar, is now worth about $1.25 and could easily rise if its value becomes connected to oil on a large scale.
end quote.......
http://www.dailykos.com/storyonly/2005/12/27/115725/53

MORE!
http://www.iraqwar.mirror-world.ru/article/73937
http://prudentinvestor.blogspot.com/2005/11/unpleasant-trend-fed-counters-by.html

Have been following this for a long while..I found the other articles in my email
quote......
If we correct about M3 and the Iran Bourse all creating a 'Perfect Storm'this will be the major players and the scenario that could happen.
Another good article on M3
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=712

Did you ever see the '81 movie ROLLOVER with Jane Fonda & Kris Kristofferson?? Life imitates art!

end quote......

[muriel_volestrangler]

60. Paul Craig Roberts is an economist, not just a blogger

http://www.vdare.com/roberts/bio.htm

He's a paleoconservative who is very much against Bush's wars. He's also highly qualified. I think I'd turn around your warning about listening too much to bloggers, and say it straight back to you.

I posted this last month, and no-one reacted positively or negatively - have you any comment?

For instance, the total amount traded in currency each day is enormous:

An estimated 1,500 billion US dollars are traded each day on the world's foreign exchange markets. Most transactions are for less than one week - most within a day - and the interbank share is approximately 70-80 per cent of the total. To a large extent, the high volume of the transactions reflects genuine needs to cover currency risks and spread the risks among different participants in the exchange market, in much the same ways that insurance risks are distributed on the international reinsurance market. Certainly, a single trade transaction may easily result in ten currency transactions because the currency risk is passed around among currency dealers like a hot potato. In most countries there are strict regulations regarding how much uncovered currency exposure banks may accept.

http://www.globalpolicy.org/socecon/glotax/currtax/2001/ICCTobin0114.htm

Compare that with:

On average 68 million barrels of crude oil are produced each day (2000 figures), 32% of it in the Middle East, the single most important oil producing region in the world. About 60% of all the oil being produced is already committed and 40% is sold on open markets.

http://www.people.hofstra.edu/geotrans/eng/ch5en/appl5en/ch5a1en.html

So that's 40% of 68 million barrels, at, say $70 a barrel, which is nearly $2 billion a day traded on open markets. Compare that with the one tenth of the $1500 billion that the first article estimates is actual trade transactions, rather than currency market churn - $2 billion v. $150 billion. Or perhaps use the figure the CIA Factbook gives for total world exports - $9 trillion a year, or about $25 billion a day. Even with this lower figure for world trade, the oil markets are about 8% of the total. Then you have to decide how much of that trade Iran will actually win for its new market. It's probably going to be less than 2% of world trade for the forseeable future.

I think Roberts is right - use of the euro for oil transactions is more of a symptom than a cause. The bigger question is whether foreign countries will continue to invest their profits in US government bonds, or if they'll become less willing to - in which case US interest rates will have to continue to rise to get people to lend the government money. There's a similar problem with the US current account deficit - either US companies sell off assets abroard, or foreigners buy assets in the US, to cover it. In the long term, this has to be balanced somehow. I think the US dollar will have to decline in value - but if US interest rates stay high, that will be resisted. That's the problem with double deficits.

[serryjw]

64. I agree

The is a big problem. Now Iran may not to be able to do us huge damage at a % of the whole but for countries to be able to trade and eliminate US from the mix is frightening to leadership that WANTS to be the only world power. Remember there is so such a thing as the US dollar(not backed buy gold)...only the petrodollar & what is will buy in a world with declining resources. 2-3 % is HUGE

[hang a left]

57. My first thought when reading that was

So there are no oil buyers out there?? WTF?

[Bushwick Bill]

49. William Clark is no slouch.

Here are some articles from him.
http://www.energybulletin.net/7707.html
http://www.globalresearch.ca/articles/CLA410A.html

And a few others on this issue. Let the readers decide.
http://globalresearch.ca/index.php?context=viewArticle&code=KEE20060210&articleId=1936
http://www.upi.com/InternationalIntelligence/view.php?StoryID=20060118-052333-1392r
http://www.energybulletin.net/12125.html

[IronLionZion]

61. Thank you

that's the first I've heard of it. And it makes perfect sense.

[lectrobyte]

67. I'm just considering some of the points of that article, and I have

trouble buying the debunking. Reduced demand for the dollar as a trading currency would be a huge hit from everything I've read, and combined with our spending and trade deficits...

Anyway, considering some of the points in dailykos

Market standard. Why couldn't they set their own in Euros? Doesn't seem like a big problem. The price will adjust to supply and demand irrespective of the standard.

Liquidity. What? How will they ensure there are buyers? The world wants oil. And it will be wanting more.

Rules. Does the author really think the rest of the world can't trade commodities without "Western Law"?

IT Operations. Can't attract people to Tehran? WTF? There are lots of sharp Iranian IT people, or they could hire some of the world class Indian or Chinese companies to handle that part of it. I personally know of several who have left the US to return to Iran in the last few years.

And a lot of other stuff about why buyers not wanting to make changes... Well, if there are financial advantages to cut out the petrodollar middleman, why not? All the stuff you want to import into Iran is perhaps better purchased with Euros, since Europe is closer and friendlier, and China and Japan already have more dollars than they want.

[Turn CO Blue]

23. Is the Iran oil bourse theory likely or utter nonsense?

Here are some thoughtful diaries on DailyKos written that confront the Iran oil bourse theories as utter nonsense...

DU'ers - You read and decide for yourself, as economics is beyond me.

So if these guys are correct and the oil bourse theory is full of holes (economically and factually), then there is some other reason for the move toward a war in Iran. We need to discover that reason.

--------------------------------------------------------------------
Iranian Oil Bourse Nonsense
by HiD
Fri Feb 24, 2006 at 05:38:24 AM PDT

<http://www.dailykos.com/storyonly/2006/2/24/73824/2450>
--------------------------------------------------------------------

Let me kill off once and for all the Iranian oil bourse story
by Jerome a Paris
Fri Feb 24, 2006 at 05:49:40 AM PDT

<http://www.dailykos.com/storyonly/2006/2/24/74940/5678>
(snip)
Crazy scenarios involving Iran's purported attempts to create an oil bourse to start selling oil in euros make the rounds regularly, and even get recommended with alacrity on DKos.

These things WILL NOT HAPPEN, and we have, as a supposedly reality-based community, to focus on real issues and not imaginary ones.

So let me explain why an Iranian oil bourse will not work for the foreseeable future. I hope that this diary can be used as a handy reference when this crops up again in the future.
----------------------------------------------------------------------

[Donailin]

26. I just posted Jeromes diary

Informed minds think alike.

[bpilgrim]

40. If they build it, they will come

it sounds like it is going to be built & to poo-poo the threat to american hegimony with our current standing in the world & the fact of PEAK OIL is to simply whistle past the grave yard.

this is not just a market for iran to sell oil, it will be open to all & there will be a huge interest in getting oil from ANYONE you can, same as it ever was * 1000.

fyi

Iran is The Next Battle Field

By: Dr. Elias Akleh

...

To maintain the purchasing power of any currency its value must be backed by gold. The American Dollar is the exception to this rule. The Dollar is a fiat currency backed only by oil trade that uses only Dollar as its currency. Every country in the world must hold American Dollars to be able to purchase oil. The more demand for oil the more demand for the Dollar. This demand supports the value of the Dollar, and in turn supports the American economy. Switching oil trade from Dollar to Euro or to any other currency would reduce the demand for the Dollar, cause the reduction of its purchasing power and the inevitable collapse of the American economy.

Understanding the risk Iran is trying to win as much partners as it could on its side. Iran gave the Asian Capital Partners and the Future Bank of Bahrain permissions to invest 100 million Euros each in its stock market. Three other Lebanese big investors were also given permission to invest up to 50 million Euros in Iran’s stock market. Iran is now closing a deal with China that would make Iran the leading oil supplier to china. This long-term deal is valued at $100 billion. China’s demand for oil is expected to soar exponentially in the next few years. Iran is also negotiating with European gas companies such as Total, Shell and Repsol in an attempt to give them rights to produce liquefied natural gas (LNG) in Iran.

Iran was neither the first nor the only country to consider switching to Euro. In November 2000 Iraq made that shift. Through its Oil for Food Program Iraq had converted all its money in its UN account into Euro. It also had converted its $10 billion reserve fund into Euro. The American/British invasion of Iraq had put a stop to this switch, and they came to control the second largest oil source in the world, giving them a “veto power” in OPEC.

more...
http://www.amin.org/eng/uncat/2006/mar/mar5-0.html

peace

[Raydawg1234]

55. I doubt anybody here will pay any atention, there is this tendency here

to always want to think the worst.

[RazzleDazzle]

28. Bingo! Bingo, bingo, bingo, bingo, bingo, BINGO!!!!!

I keep forgetting about the oil bourse thing. That's the reason we must attack Iran, must demonize them, must sabre-rattle over and around them, thump our chests and play he-men, shake our fists and throw curses at them.

[tocqueville]

46. the reason to attack Iran is Saudi Arabia and Egypt.

Because if Iran goes nuclear, those both countries would go nuclear within the two coming years (they are already trying). A nuclear Saudi Arabia is a nightmare for the US and the West.

who wants radioactive oilfields ?

[FreedomAngel82]

33. Very sad and scary

:( And of course Bush isn't going to share in the oil so why are they going to help him? I wonder if he's trading secrets, military weapons etc.

[bpilgrim]

36. Chomsky's article was pretty scary, too...

World in Peril, Chomsky tells overflow crowd
more...
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x195246

we all already knew the chimp is nuts... :scared:

peace

[lonestarnot]

43. Well I hope he runs right in there flight suit and all.