# OPEC could ditch dollars for euros

• EnumaElish
In summary, OPEC secretary general Abdullah al-Badri stated that the organization may switch the pricing of oil from dollars to euros within the next decade. This is a sensitive topic, as discussed by Saudi Arabia's Foreign Minister Prince Saud al-Faisal. Badri also noted that several oil exporters are already using euros for purchasing other commodities. The current difficulties facing oil exporting countries further highlight the possibility of this switch. The probability of OPEC abandoning the dollar can be calculated based on the current value of the dollar and the potential consequences. Additionally, the possibility of the Iraq war being influenced by Saddam's desire to switch to euros is also mentioned.
EnumaElish
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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.

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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 ).

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?

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

Not a big surprise.

## 1. What is OPEC?

OPEC stands for Organization of the Petroleum Exporting Countries. It is a group of 15 countries that produce and export large amounts of oil.

## 2. Why is OPEC considering ditching the US dollar for the euro?

OPEC is considering this move as a way to mitigate the effects of fluctuations in the US dollar's value. By switching to the euro, OPEC member countries can protect their revenues and reduce their dependence on the US dollar.

## 3. How would this change affect the global economy?

If OPEC were to switch to the euro, it could potentially weaken the US dollar's position as the dominant currency in international trade. This could also lead to a decrease in demand for US dollars, which could impact its value.

## 4. What are the potential benefits of OPEC ditching the US dollar for the euro?

Switching to the euro could provide OPEC member countries with more stability and predictability in their oil revenues. It could also increase their purchasing power in Europe and potentially strengthen economic ties with European countries.

## 5. Are there any potential drawbacks to this move?

One potential drawback is that it could lead to a decrease in demand for US dollars, which could have a negative impact on the US economy. It could also cause some volatility in the global oil markets as countries adjust to the new currency for oil trade.