The Telegraph: Iran 'wages economic war'

Two countries using their own currencies in bilateral trade constiitutes an ‘attack’ - and Iran is waging 'economic war'

This is what is really happening and this is and has always been the primary reason for US/Iranian hostility. Control of the oil is important but the US has never deluded itself into thinking it could physically control Iranian oil. Hell, it hasn't been able to fully control Iraqi oil and is even losing its grip on that as Iraq teeters on sectarian civil war. 

Saddam Hussein announced he intended to start pricing on in Euros back around 2000. He had to go. Iran has recently opened an oil bourse  (in the works for five years) to trade its oil outside of the U.S. dollar and is moving rapidly and successfully in that direction with the help of the rest of the world. For weeks we have been bringing you all the moves out of the dollar by major economies.

Since 1944 and the Bretton Woods era the U.S. has ruled the world because the world had to buy dollars to buy oil. The United States has arrogantly offered itself up on the chopping block and is now mortally wounded for the world to see. It bought its own lies about Peak Oil and oil supplies and has been shown to be toothless as the world refused to participate in a U.S.-led embargo on Iranian oil. 

The well-established truth now is that Iranian oil can be replaced from no other source(s) and the world will now do, or trade whatever it has to to obtain it, especially and including dumping the dollar as the means of purchase. The United States is driving the world into "System D".

Every day we document on the World News Desk the rate at which the dollar is being dumped. Hyperinflation in America is now a given and it should arrive this year. -- MCR

Iran presses ahead with dollar attack

Last week, the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad’s vision of economic war with the west.

the Telegraph,

12 February, 2012

“The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.

“Recall that Saddam [Hussein] announced Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003,” the Times continued. 

“Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the 'crisis’ has not come to a head long before now.”

Iran has the third-largest oil reserves in the world and pricing oil in currencies other than dollars is a provocative move aimed at Washington. If Iran switches to the non-dollar terms for its oil payments, there could be a new oil price that would be denominated in euro, yen or even the yuan or rupee.

India is already in talks with Iran over how it can pay for its oil in rupees.

Even more surprisingly, reports have suggested that India is even considering paying for its oil in gold bullion. However, it is more likely that the country will pay in rupees, a currency that is not freely convertible.

Last week, Indian state-owned group Hindustan Petroleum said that Indian businesses could not pay for Iranian crude imports in rupees unless the federal finance ministry exempted such payments from crippling withholding tax. This issue remains unresolved.

India and Iran have agreed – but not yet started – to settle 45pc of payments for Iranian oil in rupees. Iran will then use the currency to buy imports from India.

New Delhi currently spends about $12bn (£7.6bn) on Iranian oil each year, importing 12pc of the country’s needs from the country.

India pays for its oil in dollars, routed through a bank in Turkey after a previous mechanism was shut down in 2010. The Indian government has been resisting calls to stop importing oil from the pariah state.

“There have been problems with regard to Iran’s nuclear programme,” Manmohan Singh, India’s prime minister, said on Friday. “We sincerely believe that this issue can be and should be resolved by giving maximum scope to diplomacy.”

All of this means that the EU ban on Iranian oil imports, which comes into force on July 1, could hit Europe harder than it does Iran.

The country currently supplies 500,000 barrels of oil per day to the EU and there is a potential oil price spike in the offing should Iran pre-emptively stop the flow of oil to Europe, which it has threatened to do.

This could be disastrous to businesses that are already finding the economic climate tough.

“While Iran may be able to find markets for much of its oil output in Asia, the alternative sources of supply to Europe are still unclear,” Caroline Bain, a commodities analyst at the Economist Intelligence Unit, said.

“Until the supply outlook stabilises, the oil price is expected to continue to reflect this uncertainty rather than the likelihood of lower growth in global oil consumption in 2012.”

The worries are already sending ripples of concern around the world.

“While we have been listing the Iranian situation as a source of upside risk for a decade, there are some new factors that can make for a far more dangerous outcome, as the current drift of policy on both sides is creating the risk of a significant escalation,” Sudakshina Unnikrishnan, an analyst at Barclays Capital, said.

“Iran may close the Strait of Hormuz, causing an anticipated 50pc rise in crude oil prices, resulting in widespread economic havoc,” the Tehran Times columnist noted.

So the EU ban could be counter productive, as it keeps the oil price high. However, as long as President Ahmadinejad’s economic war doesn’t escalate into an actual war, we may manage to avoid a crippling oil spike.

India increases Iran oil imports

Teheran Times,

11 February, 2012

Iran's crude oil exports to India have increased 37.5% in January.

India has increased oil imports from Iran to become the Islamic Republic's largest customer last month, ignoring recent sanctions imposed by US and EU on importing Iran’s oil.

According to The Wall Street Journal Iranian crude exports to India rose to 550,000 barrels a day in January, up 37.5 percent from December 2011.

The development, the report said, has partly offset a 50 percent cut in crude exports to China as a result of pricing dispute. China now imports around 250,000 barrels a day from Iran.

The news comes despite the West’s rising pressure on Iran to halt its peaceful nuclear program.

For article GO HERE