Published on Tuesday, August 9, 2005 by Media Monitors Network
Petrodollar Warfare: Dollars, Euros and the
Upcoming Iranian Oil Bourse
By William Clark
“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
Hussein.[1][2]
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”).[3] 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.
In 2003 the global community witnessed a combination of petrodollar
warfare and oil depletion warfare. The majority of the world’s
governments – especially the E.U., Russia and China – were not amused –
and neither are the U.S. soldiers who are currently stationed inside a
hostile Iraq. In 2002 I wrote an award-winning online essay that
asserted Saddam Hussein sealed his fate when he announced in September
2000 that Iraq was no longer going to accept dollars for oil being sold
under the UN’s Oil-for-Food program, and decided to switch to the euro
as Iraq’s oil export currency.[4]
Indeed, my original pre-war hypothesis was validated in a Financial
Times article dated June 5, 2003, which confirmed Iraqi oil sales
returning to the international markets were once again denominated in
U.S. dollars – not euros.
The tender, for which bids are due by June 10, switches the
transaction back to dollars -- the international currency of oil sales
- despite the greenback's recent fall in value. Saddam Hussein in 2000
insisted Iraq's oil be sold for euros, a political move, but one that
improved Iraq's recent earnings thanks to the rise in the value of the
euro against the dollar [5]
The Bush administration implemented this currency transition despite
the adverse impact on profits from Iraqi’s export oil sales.[6] (In
mid-2003 the euro was valued approx. 13% higher than the dollar, and
thus significantly impacted the ability of future oil proceeds to
rebuild Iraq’s infrastructure). Not surprisingly, this detail has never
been mentioned in the five U.S. major media conglomerates who control
90% of information flow in the U.S., but confirmation of this
vital
fact provides insight into one of the crucial – yet overlooked –
rationales for 2003 the Iraq war.
Concerning Iran, recent articles have revealed active Pentagon planning
for operations against its suspected nuclear facilities. While the
publicly stated reasons for any such overt action will be premised as a
consequence of Iran's nuclear ambitions, there are again
unspoken
macroeconomic drivers underlying the second stage of petrodollar
warfare – Iran's upcoming oil bourse. (The word bourse refers to a
stock exchange for securities trading, and is derived from the French
stock exchange in Paris, the Federation Internationale des Bourses de
Valeurs.)
In essence, Iran is about to commit a far greater “offense” than Saddam
Hussein's conversion to the euro for Iraq’s oil exports in the fall of
2000. Beginning in March 2006, the Tehran government has plans to begin
competing with New York's NYMEX and London's IPE with respect to
international oil trades – using a euro-based international oil-trading
mechanism.[7]
The proposed Iranian oil bourse signifies that without some sort of US
intervention, the euro is going to establish a firm foothold in the
international oil trade. Given U.S. debt levels and the stated
neoconservative project of U.S. global domination, Tehran’s objective
constitutes an obvious encroachment on dollar supremacy in the crucial
international oil market.
From the autumn of 2004 through August 2005, numerous leaks by
concerned Pentagon employees have revealed that the neoconservatives in
Washington are quietly – but actively – planning for a possible attack
against Iran. In September 2004 Newsweek reported:
Deep in the Pentagon, admirals and generals are updating
plans for possible U.S. military action in Syria and Iran. The Defense
Department unit responsible for military planning for the two
troublesome countries is “busier than ever,” an administration official
says. Some Bush advisers characterize the work as merely an effort to
revise routine plans the Pentagon maintains for all contingencies in
light of the Iraq war. More skittish bureaucrats say the updates are
accompanied by a revived campaign by administration conservatives and
neocons for more hard-line U.S. policies toward the countries…’
…administration hawks are pinning their hopes on regime change in
Tehran – by covert means, preferably, but by force of arms if
necessary. Papers on the idea have circulated inside the
administration, mostly labeled
"draft" or "working draft" to evade
congressional subpoena powers and the Freedom of Information Act.
Informed sources say the memos echo the administration's abortive Iraq
strategy: oust the existing regime, swiftly install a pro-U.S.
government in its place (extracting the new regime's promise to
renounce any nuclear ambitions) and get out. This daredevil scheme
horrifies U.S. military leaders, and there's no evidence that it has
won any backers at the cabinet level.[8]
Indeed, there are good reasons for U.S. military commanders to be
‘horrified’ at the prospects of attacking Iran. In the December 2004
issue of the Atlantic Monthly, James Fallows reported that numerous
high-level war-gaming sessions had recently been completed by Sam
Gardiner, a retired Air Force colonel who has run war games at the
National War College for the past two decades.[9] Col. Gardiner
summarized the outcome of these war games with this statement, “After
all this effort, I am left with two simple sentences for policymakers:
You have no military solution for
the issues of Iran. And you have to
make diplomacy work.” Despite Col. Gardiner’s warnings, yet
another
story appeared in early 2005 that reiterated this administration’s
intentions towards Iran. Investigative reporter Seymour Hersh’s article
in The New Yorker included interviews with various high-level U.S.
intelligence sources. Hersh wrote:
In my interviews [with former high-level intelligence officials], I was
repeatedly told that the next strategic target was Iran. Everyone is
saying, ‘You can’t be serious about targeting Iran. Look at Iraq,’ the
former [CIA] intelligence official told me. But the [Bush
administration officials] say, ‘We’ve got some lessons learned – not
militarily, but how we did it politically. We’re not going to rely on
agency pissants.’ No loose ends, and that’s why the C.I.A. is out of
there.[10]
The most recent, and by far the most troubling, was an article in The
American Conservative by intelligence analyst Philip Giraldi. His
article, “In Case of Emergency, Nuke Iran,” suggested the resurrection
of active U.S. military planning against Iran – but with the shocking
disclosure that in the event of another 9/11-type terrorist attack on
U.S. soil, Vice President Dick Cheney’s office wants the Pentagon to be
prepared to launch a potential tactical nuclear attack on Iran – even
if the Iranian government was not involved with any such terrorist
attack against the U.S.:
The Pentagon, acting under
instructions from Vice President Dick
Cheney's office, has tasked the United States Strategic Command
(STRATCOM) with drawing up a contingency plan to be employed in
response to another 9/11-type terrorist attack on the United States.
The plan includes a large-scale air assault on Iran employing both
conventional and tactical nuclear weapons. Within Iran there
are more
than 450 major strategic targets, including numerous suspected
nuclear-weapons-program development sites. Many of the targets are
hardened or are deep underground and could not be taken out by
conventional weapons, hence the nuclear option. As in the case of Iraq,
the response is not conditional on Iran actually being involved in the
act of terrorism directed against the United States. Several senior Air
Force officers involved in the planning are reportedly appalled at the
implications of what they are doing – that Iran is being set up for an
unprovoked nuclear attack – but no one is prepared to damage his
career
by posing any objections.[11]
Why would the Vice President instruct the U.S. military to prepare
plans for what could likely be an unprovoked nuclear attack against
Iran? Setting aside the grave moral implications for a moment, it is
remarkable to note that during the same week this “nuke Iran” article
appeared, the Washington Post reported that the most recent National
Intelligence Estimate (NIE) of Iran’s nuclear program revealed that,
“Iran is about a decade away from manufacturing the key ingredient for
a nuclear weapon, roughly doubling the previous estimate of five
years.”[12]
This article carefully noted this assessment was a “consensus among
U.S. intelligence agencies, [and in] contrast with forceful public
statements by the White House.” The question remains, Why would the
Vice President advocate a possible tactical nuclear attack against Iran
in the event of another major terrorist attack against the U.S. – even
if Tehran was innocent of involvement?
Perhaps one of the answers
relates to the same obfuscated reasons why
the U.S. launched an unprovoked invasion to topple the Iraq government
– macroeconomics and the
desperate desire to maintain U.S. economic
supremacy. In essence, petrodollar hegemoy is eroding, which
will
ultimately force the U.S. to significantly change its current tax,
debt, trade, and energy policies, all of which are severely unbalanced.
World oil production is reportedly “flat out,” and yet the
neoconservatives are apparently willing to undertake huge strategic and
tactical risks in the Persian Gulf. Why? Quite simply – their stated
goal is U.S. global domination – at any cost.
To date, one of the more difficult technical obstacles concerning a
euro-based oil transaction trading system is the lack of a
euro-denominated oil pricing standard, or oil ‘marker’ as it is
referred to in the industry. The three current oil markers are U.S.
dollar denominated, which include the West Texas
Intermediate crude
(WTI), Norway Brent
crude, and the UAE Dubai crude.
However, since the
summer of 2003 Iran has required payments in the euro currency for its
European and Asian/ACU exports – although the oil pricing of
these
trades was still denominated in the dollar.[13]
Therefore a potentially significant news story was reported in June
2004 announcing Iran’s intentions to create of an Iranian oil bourse.
This announcement portended competition would arise between the Iranian
oil bourse and London’s International Petroleum Exchange (IPE), as well
as the New York Mercantile Exchange (NYMEX). [Both the IPE and NYMEX
are owned by a U.S. consortium, and operated by an Atlanta-based
corporation, IntercontinentalExchange, Inc.]
The macroeconomic implications of a successful Iranian bourse are
noteworthy. Considering that in mid-2003 Iran switched its oil payments
from E.U. and ACU customers to the euro, and thus it is logical to
assume the proposed Iranian bourse will usher in a fourth crude oil
marker – denominated in the euro currency. This event would remove the
main technical obstacle for a broad-based petroeuro system for
international oil trades. From a purely economic and monetary
perspective, a petroeuro system is a logical development given that the
European Union imports more oil from OPEC producers than does the U.S.,
and the E.U. accounted for 45% of exports sold to the Middle East.
(Following the May 2004 enlargement, this percentage likely increased).
Despite the complete absence of coverage from the five U.S. corporate
media conglomerates, these foreign news stories suggest one of the
Federal Reserve’s nightmares may begin to unfold in the spring of 2006,
when it appears that international buyers will have a choice of buying
a barrel of oil for $60 dollars on the NYMEX and IPE - or purchase a
barrel of oil for €45 - €50 euros via the Iranian Bourse. This
assumes
the euro maintains its current 20-25% appreciated value relative to the
dollar – and assumes that some sort of US "intervention" is not
launched against Iran.
The upcoming bourse will introduce petrodollar versus petroeuro
currency hedging, and fundamentally new dynamics to the biggest market
in the world - global oil and gas trades. In essence, the U.S. will no
longer be able to effortlessly expand its debt-financing via issuance
of U.S. Treasury bills, and the dollar’s international demand/liquidity
value will fall.
It is unclear at the time of writing if this project will be
successful, or could it prompt overt or covert U.S. interventions –
thereby signaling the second phase of petrodollar warfare in the Middle
East. Regardless of the potential U.S. response to an Iranian petroeuro
system, the emergence of an oil exchange market in the Middle East is
not entirely surprising given the domestic
peaking and decline of oil
exports in the U.S. and U.K, in comparison to the remaining oil
reserves in Iran, Iraq and Saudi Arabia.
What we are witnessing is a battle for oil currency supremacy. If
Iran’s oil bourse becomes a successful alternative for international
oil trades, it would challenge the hegemony currently enjoyed by the
financial centers in both London (IPE) and New York (NYMEX), a factor
not overlooked in the following (UK) Guardian article:
Iran is to launch an oil trading market for Middle East and Opec
producers that could threaten the supremacy of London's International
Petroleum Exchange.
…Some industry experts have warned the Iranians and other OPEC
producers that western exchanges are controlled by big financial and
oil corporations, which have a vested interest in market volatility.
The IPE, bought in 2001 by a consortium that includes BP, Goldman Sachs
and Morgan Stanley, was unwilling to discuss the Iranian move
yesterday. “We would not have any comment to make on it at this stage,”
said an IPE spokeswoman. [14]
During an important speech in April 2002, Mr. Javad Yarjani, an OPEC
executive, described three pivotal events that would facilitate an OPEC
transition to euros.[15] He stated this would be based on (1) if and
when Norway's Brent crude is re-dominated in euros, (2) if and when the
U.K. adopts the euro, and (3) whether or not the euro gains parity
valuation relative to the dollar, and the EU’s proposed expansion plans
were successful.
Notably, both of the later two criteria have transpired: the euro’s
valuation has been above the dollar since late 2002, and the euro-based
E.U. enlarged in May 2004 from 12 to 22 countries. Despite recent “no”
votes by French and Dutch voters regarding a common E.U. Constitution,
from a macroeconomic perspective, these domestic disagreements do no
reduce the euro currency’s trajectory in the global financial markets –
and from Russia and OPEC’s perspective – do not adversely impact
momentum towards a petroeuro. In the meantime, the U.K. remains
uncomfortably juxtaposed between the financial interests of the U.S.
banking nexus (New York/Washington) and the E.U. financial centers
(Paris/Frankfurt).
The most recent news reports indicate the oil bourse will start trading
on March 20, 2006, coinciding with the Iranian New Year.[16] The
implementation of the proposed Iranian oil Bourse – if successful in
utilizing the euro as its oil transaction currency standard –
essentially negates the previous two criteria as described by Mr.
Yarjani regarding the solidification of a petroeuro system for
international oil trades. It should also be noted that throughout
2003-2004 both Russia and China significantly increased their central
bank holdings of the euro, which appears to be a coordinated move to
facilitate the anticipated ascendance of the euro as a second World
Reserve Currency. [17] [18]
China’s announcement in July 2005 that it was re-valuing the yuan/RNB
was not nearly as important as its decision to divorce itself from a
U.S. dollar peg by moving towards a “basket of currencies” –
likely to
include the yen, euro, and dollar.[19] Additionally, the Chinese
re-valuation immediately lowered their monthly imported “oil bill” by
2%, given that oil trades are still priced in dollars, but it is
unclear how much longer this monopoly arrangement will last.
Furthermore, the geopolitical stakes for the Bush administration were
raised dramatically on October 28, 2004, when Iran and China signed a
huge oil and gas trade agreement (valued between $70 - $100 billion
dollars.) [20] It should also be noted that China currently
receives
13% of its oil imports from Iran. In the aftermath of the Iraq
invasion, the U.S.-administered Coalition Provisional Authority (CPA)
nullified previous oil lease contracts from 1997-2002 that France,
Russia, China and other nations had established under the Saddam
regime. The nullification of these contracts worth a reported $1.1
trillion created political tensions between the U.S and the European
Union, Russia and China.
The Chinese government may fear the same fate awaits their oil
investments in Iran if the U.S. were able to attack and topple the
Tehran government. Despite U.S. desires to enforce petrodollar
hegemony, the geopolitical risks of an attack on Iran’s nuclear
facilities would surely create a
serious crisis between Washington and
Beijing.
It is increasingly clear that a confrontation and possible war with
Iran may transpire during the second Bush term. Clearly, there are
numerous tactical risks regarding neoconservative strategy towards
Iran. First, unlike Iraq, Iran has a robust military capability.
Secondly, a repeat of any “Shock and Awe” tactics is not advisable
given that Iran has installed sophisticated anti-ship missiles on the
Island of Abu Musa, and therefore controls the critical Strait of
Hormuz – where all of the Persian Gulf bound oil tankers must pass.[21]
The immediate question for Americans? Will the neoconservatives attempt
to intervene covertly and/or overtly in Iran during 2005 or 2006 in a
desperate effort to prevent the initiation of euro-denominated
international crude oil sales? Commentators in India are quite correct
in their assessment that a U.S.
intervention in Iran is likely to prove
disastrous for the United States, making matters much worse regarding
international terrorism, not to the mention potential effects on the
U.S. economy.
…If it [U.S.] intervenes again, it is absolutely certain it will not be
able to improve the situation…There is a better way, as the
constructive engagement of Libya’s Colonel Muammar Gaddafi has
shown...Iran is obviously a more complex case than Libya, because power
resides in the clergy, and Iran has not been entirely transparent about
its nuclear programme, but the sensible way is to take it gently, and
nudge it to moderation. Regime change will only worsen global Islamist
terror, and in any case, Saudi Arabia is a fitter case for democratic
intervention, if at all.[22]
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.
Multilateral compromise with the EU and OPEC regarding oil currency is
certainly preferable to an ‘Operation Iranian Freedom,’ or perhaps
another CIA-backed coup such as operation "Ajax” from 1953.
Despite the
impressive power of the U.S. military, and the ability of our
intelligence agencies to facilitate ‘interventions,’ it would be
perilous and possibly ruinous for the U.S. to intervene in Iran given
the dire situation in Iraq. The Monterey Institute of International
Studies warned of the possible consequences of a preemptive attack on
Iran’s nuclear facilities:
An attack on Iranian nuclear facilities…could have various
adverse effects on U.S. interests in the Middle East and the world.
Most important, in the absence of evidence of an Iranian illegal
nuclear program, an attack on Iran’s nuclear facilities by the U.S. or
Israel would be likely to strengthen Iran's international stature and
reduce the threat of international sanctions against Iran.[23]
Synopsis:
It is not yet clear if a U.S. military expedition will occur in a
desperate attempt to maintain petrodollar supremacy. Regardless of the
recent National Intelligence Estimate that down-graded Iran’s potential
nuclear weapons program, it appears increasingly likely the Bush
administration may use the specter of nuclear weapon proliferation as a
pretext for an intervention, similar to the fears invoked in the
previous WMD campaign regarding Iraq.
If recent stories are correct regarding Cheney’s plan to possibly use
another 9/11 terrorist attack as the pretext or casus belli for a U.S.
aerial attack against Iran, this would confirm the Bush administration
is prepared to undertake a desperate military strategy to thwart Iran’s
nuclear ambitions, while simultaneously attempting to prevent the
Iranian oil Bourse from initiating a euro-based system for oil trades.
However, as members of the U.N. Security Council; China, Russia and
E.U. nations such as France and Germany would likely veto any
U.S.-sponsored U.N. Security Resolution calling the use of force
without solid proof of Iranian culpability regarding a terrorist attack
in the U.S. A unilateral military strike on Iran would isolate the U.S.
government in the eyes of the world community, and it is conceivable
that such an overt action could provoke other industrialized nations to
strategically abandon the dollar en masse.
Indeed, such an event would create pressure for OPEC and Russia to move
towards a monopoly petroeuro system in an effort to cripple the U.S.
dollar and thwart the U.S. global military presence. I refer to this in
my book as the “rogue nation hypothesis.” (A similar tactic was used by
the U.S. to end the 1956 Suez crisis.)
While central bankers throughout the
world community would be extremely
reluctant to ‘dump the dollar,’ the reasons for any such drastic
reaction are likely straightforward from their government’s perspective
– the global community is dependent on the oil and gas energy supplies
found in the Persian Gulf.
Hence, industrialized nations would likely move in tandem on the
currency exchange markets in an effort to thwart the neoconservatives
from pursuing their desperate strategy of dominating the world’s
largest hydrocarbon energy supply. Any such efforts that resulted in a
dollar currency crisis would be undertaken – not to cripple the U.S.
dollar and economy as punishment towards the American people per se –
but rather to
thwart further unilateral warfare and its potentially
destructive effects on the critical oil production and shipping
infrastructure in the Persian Gulf.
Barring a U.S. attack, it appears imminent that Iran’s euro-denominated
oil bourse will open in March 2006. Logically, the most appropriate
U.S. strategy is compromise with the E.U. and OPEC towards a
dual-currency system for international oil trades.
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
***
Footnotes:
[1] Ron Suskind, The Price of Loyalty: George W. Bush, the White House,
and the Education of Paul O’ Neill, Simon & Schuster publishers
(2004)
[2] Richard A. Clarke, Against All Enemies: Inside America’s War on
Terror, Free Press (2004)
[3] William Clark, “Revisited - The Real Reasons for the Upcoming War
with Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken
Truth,” January 2003 (updated January 2004)
www.ratical.org/ratville/CAH/RRiraqWar.html
[4] Peter Philips, Censored 2004, The Top 25 Censored News Stories,
Seven Stories Press, (2003) General website for Project Censored: www.projectcensored.org/
Story #19: U.S. Dollar vs. the Euro: Another Reason for the Invasion of
Iraq
www.projectcensored.org/publications/2004/19.html
[5] Carol Hoyos and Kevin Morrison, "Iraq returns to the international
oil market," Financial Times, June 5, 2003
[6] Faisal Islam, “Iraq nets handsome profit by dumping dollar for
euro,” [UK] Guardian, February 16, 2003
observer.guardian.co.uk/iraq/story/0,12239,896344,00.html
[7] “Oil bourse closer to reality,” IranMania.com,
December 28, 2004. Also see: “Iran oil bourse wins authorization,”
Tehran Times, July 26, 2005
[8] “War-Gaming the Mullahs: The U.S. weighs the price of a pre-emptive
strike,” Newsweek, September 27 issue, 2004. Online: www.msnbc.msn.com/id/6039135/site/newsweek/
[9] James Fallows, “Will Iran be Next?,” Atlantic Monthly, December
2004, pgs. 97 – 110
[10] Seymour Hersh, “The Coming Wars,” The New Yorker, January 24th –
31st issue, 2005, pgs. 40-47
Posted online January 17, 2005. Online: www.newyorker.com/fact/content/?050124fa_fact
[11] Philip Giraldi, “In Case of Emergency, Nuke Iran,” American
Conservative, August 1, 2005
[12] Dafina Linzer, “Iran Is Judged 10 Years From Nuclear Bomb U.S.
Intelligence Review Contrasts With Administration Statements,”
Washington Post, August 2, 2005; Page A01
[13] C. Shivkumar, “Iran offers oil to Asian union on easier terms,”
The Hindu Business Line (June 16, 2003). www.thehindubusinessline.com/bline/2003/06/17/stories/2003061702380500.htm
[14] Terry Macalister, “Iran takes on west's control of oil trading,”
The [UK] Guardian, June 16, 2004
www.guardian.co.uk/business/story/0,3604,1239644,00.html
[15] “The Choice of Currency for the Denomination of the Oil Bill,"
Speech given by Javad Yarjani, Head of OPEC's Petroleum Market Analysis
Dept, on The International Role of the Euro (Invited by the Spanish
Minister of Economic Affairs during Spain's Presidency of the EU)
(April 14, 2002, Oviedo, Spain)
www.opec.org/NewsInfo/Speeches/sp2002/spAraqueSpainApr14.htm
[16] “Iran's oil bourse expects to start by early 2006,” Reuters,
October 5, 2004 www.iranoilgas.com
[17] “Russia shifts to euro as foreign currency reserves soar,” AFP,
June 9, 2003
www.cdi.org/russia/johnson/7214-3.cfm
[18] “China to diversify foreign exchange reserves,” China Business
Weekly, May 8, 2004
www.chinadaily.com.cn/english/doc/2004-05/08/content_328744.htm
[19] Richard S. Appel, “The Repercussions from the Yuan’s Revaluation,”
kitco.com, July 27, 2005
www.kitco.com/ind/appel/jul272005.html
[20] “China, Iran sign biggest oil & gas deal,” China Daily,
October 31, 2004. Online: www.chinadaily.com.cn/english/doc/2004-10/31/content_387140.htm
[21] Analysis of Abu Musa Island, www.globalsecurity.org
www.globalsecurity.org/wmd/world/iran/abu-musa.htm
[22] “Terror & regime change: Any US invasion of Iran will have
terrible consequences,” News Insight: Public Affairs Magazine, June 11,
2004 www.indiareacts.com/archivedebates/nat2.asp?recno=908&ctg=World
[23] Sammy Salama and Karen Ruster, “A Preemptive Attack on Iran's
Nuclear Facilities: Possible Consequences,” Monterry Institute of
International Studies, August 12, 2004 (updated September 9, 2004) cns.miis.edu/pubs/week/040812.htm
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
William Clark has recently published, via New Society publishers, Petrodollar Warfare -
Oil, Iraq and the Future of the Dollar.
The invasion of Iraq may well be remembered as the first oil currency
war. Far from being a response to 9-11 terrorism or Iraq’s alleged
weapons of mass destruction, Petrodollar Warfare argues that the
invasion was precipitated by two converging phenomena: the imminent
peak in global oil production, and the ascendance of the euro currency.
Energy analysts agree that world oil supplies are about to peak, after
which there will be a steady decline in supplies of oil. Iraq,
possessing the world’s second largest oil reserves, was therefore
already a target of U.S. geostrategic interests. Together with the fact
that Iraq had switched its oil currency trade to euros — rather than
U.S. dollars — the Bush administration’s unreported aim was to prevent
further OPEC momentum in favor of the euro as an alternative oil
transaction currency standard.
Meticulously researched, Petrodollar Warfare examines U.S. dollar
hegemony and the unsustainable macroeconomics of ‘petrodollar
recycling,’ pointing out that the issues underlying the Iraq War also
apply to geopolitical tensions between the U.S. and other countries
including the member states of the European Union (EU), Iran,
Venezuela, and Russia. The author warns that without changing course,
the American Experiment will end the way all empires end – with
military over-extension and subsequent economic decline. He recommends
the multilateral pursuit of both energy and monetary reforms within a
United Nations framework to create a more balanced global energy and
monetary system – thereby reducing the possibility of future oil
depletion and oil currency-related warfare.
A sober call for an end to aggressive U.S. unilateralism, Petrodollar
Warfare is a unique contribution to the debate about the future global
political economy.
About the Author: William Clark has received two Project Censored
awards for his research on oil currency conflict, and has recently
published a book, Petrodollar Warfare: Oil, Iraq and the Future of the
Dollar (New Society Publishers, 2005). He is an Information Security
Analyst, and holds a Master of Business Administration and Master of
Science in Information and Telecommunication Systems from Johns Hopkins
University. He lives near Bethesda, Maryland.
Website: www.petrodollarwarfare.com
Copyright © 2003-2005 William Clark
Reprinted for Fair Use Only Article found at :
http://www.energybulletin.net/newswire.php?id=7707
Original article :
http://usa.mediamonitors.net/content/view/full/17450