OPEC could ditch dollars for euros

[EnumaElish]

OPEC could ditch dollars for euros

Fri Feb 8, 7:10 PM ET

LONDON (AFP) - OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri told a weekly magazine.

...

MEED recalled that the pricing of oil in dollars is a sensitive topic. Saudi Arabia's Foreign Minister Prince Saud al-Faisal warned OPEC late last year that the dollar could plunge if OPEC publicly discussed abandoning it.

On Tuesday, Badri told reporters in London that several oil exporters were selling in dollars but buying other commodities in euros, calling the latter a strong currency.

The comments served to underline the difficulties currently facing oil exporting countries.

http://news.yahoo.com/s/afp/20080209/bs_afp/opeccommoditiesoilcurrency

If the dollar fell x% since Friday then the probability that OPEC will switch to euros can be calculated from:

current value of $ = $'s value (say) at noon on Friday * Prob{OPEC will not abandon $} + $'s value if OPEC abandons it * (1- Prob{OPEC will not abandon $}),

provided "$'s value if OPEC abandons it" can be assigned a quantity. E.g. if "$'s value if OPEC abandons it" = 0 (for demonstrative purposes) then:

Prob{OPEC will not abandon $} = (current value of $) / ($'s value at noon on Friday) = 1 - x.

 

[mgb_phys]

If OPEC switches to euros then the US has to pay for oil in real money instead of printing it so the probability can be calculated from :

1 - (number of US troops in your country propping up your regime + number of US troops next door ready to invade your country if you piss them off ).

 

[Poop-Loops]

One of the perceived reasons for the Iraqi war starting is because Saddam wanted to switch from Dollars to Euros. We couldn't let that happen, now could we?

 

[mgb_phys]

So probably not looking good for Iran's Euro based oil bourse then?

 

[binzing]

Not a big surprise.