Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse  

Posted by Big Gav

Quite a few people have theorised that one of the triggers for the Iraq invasion was Saddam Hussein's decision to start pricing some oil sales in euros, thereby undermining the "petro-dollar".

In the same vein, it has often been considered that possible triggers for an invasion of Iran would include events like:

1. An Iranian refusal to halt their nuclear program.
2. An Iranian move to begin selling oil priced in euros.
3. A terrorist attack in the West (or on a tanker in the Persian Gulf) being linked to Iran.

Its interesting that two of the possible triggers are both coming to a head at the same time - watch out if the other trigger happens.

"A successful Iranian bourse will solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar's hegemonic status as the monopoly oil currency. Therefore, a graduated approach is needed to avoid precipitous U.S. economic dislocations."
"This notion that the United States is getting ready to attack Iran is simply ridiculous...Having said that, all options are on the table."
-- President George W. Bush, February 2005

Contemporary warfare has traditionally involved underlying conflicts regarding economics and resources. Today these intertwined conflicts also involve international currencies, and thus increased complexity. Current geopolitical tensions between the United States and Iran extend beyond the publicly stated concerns regarding Iran's nuclear intentions, and likely include a proposed Iranian "petroeuro" system for oil trade. Similar to the Iraq war, military operations against Iran relate to the macroeconomics of 'petrodollar recycling' and the unpublicized but real challenge to U.S. dollar supremacy from the euro as an alternative oil transaction currency.

It is now obvious the invasion of Iraq had less to do with any threat from Saddam's long-gone WMD program and certainly less to do to do with fighting International terrorism than it has to do with gaining strategic control over Iraq's hydrocarbon reserves and in doing so maintain the U.S. dollar as the monopoly currency for the critical international oil market. Throughout 2004 information provided by former administration insiders revealed the Bush/Cheney administration entered into office with the intention of toppling Saddam.

Candidly stated, 'Operation Iraqi Freedom' was a war designed to install a pro-U.S. government in Iraq, establish multiple U.S military bases before the onset of global Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC momentum towards the euro as an alternative oil transaction currency ( i.e. "petroeuro"). However, subsequent geopolitical events have exposed neoconservative strategy as fundamentally flawed, with Iran moving towards a petroeuro system for international oil trades, while Russia evaluates this option with the European Union.

...
Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes...known instruments for bringing the many under the domination of the few. No nation could preserve its freedom in the midst of continual warfare.
-- James Madison, Political Observations, 1795

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