The Iranian
Threat: The Bomb
Or The Euro?
By Dr. Elias
Akleh
24 March, 2005
Amin.org
Iran
does not pose a threat to the United State because of its nuclear projects,
its WMD, or its support to terrorists organizations as the
American administration is claiming, but in its attempt to re-shape
the global economical system by converting it from a petrodollar to
a petroeuro system. Such conversion is looked upon as a flagrant declaration
of economical war against the US that would flatten the revenues of
the American corporations and eventually might cause an economic collapse.
In June of 2004
Iran declared its intention of setting up an international oil exchange
(a bourse) denominated in the Euro currency. Many oil-producing as well
as oil-consuming countries had expressed their welcome to such petroeuro
bourse. The Iranian reports had stated that this bourse may start its
trade with the beginning of 2006. Naturally such an oil bourse would
compete against Londons International Petroleum Exchange (IPE),
as well as against the New York Mercantile Exchange (NYMEX), both owned
by American corporations.
Oil consuming countries
have no choice but use the American Dollar to purchase their oil, since
the Dollar has been so far the global standard monetary fund for oil
exchange. This necessitates these countries to keep the Dollar in their
central banks as their reserve fund, thus strengthening the American
economy. But if Iran followed by the other oil-producing countries
offered to accept the Euro as another choice for oil exchange
the American economy would suffer a real crisis. We could witness this
crisis at the end of 2005 and beginning of 2006 when oil investors would
have the choice to pay $57 a barrel of oil at the American (NYMEX) and
at Londons (IPE), or pay 37 Euros a barrel at the Iranian oil
bourse. Such choice would reduce trade volumes at both the Dollar-dependent
(NYMEX) and the (IPE).
Many countries
had studied the conversion from the ever weakening petrodollar to the
gradually strengthening petroeuro system. The de-valuation of the Dollar
was caused by the American economy shying away from manufacturing local
products except those of the military -, by outsourcing the American
jobs to the cheaper third world countries and depending only on the
general service sector, and by the huge cost of two major wars that
are still going on. Foreign investors started withdrawing their money
from the shaky American market causing further devaluation of the Dollar.
The keen observer
of the money market could have noticed that the devaluation of the American
Dollar had started since November 2002, while the purchasing power of
European Euro had crept upward to reach nowadays to $1.34. Compared
to the Japanese Yen the Dollar had dropped from 104.45 to 103.90 yen.
The British pound climbed another notch from $1.9122 to $1.9272.
Economic reports
published at the beginning of this month (March) had pointed towards
the deep dive of the American economy and to the quick rise of the deficit
up to $665.90 billion at the end of 2004. The worst is still to come.
These numbers worried the international banks, who had sent some warnings
to the Bush administration.
In its economical
war Iran is treading the same path Saddam Hussein had started when he,
in 2000, converted all his reserve from the Dollar to the Euro, and
demanded payments in Euro for Iraqi oil. Many economists then mocked
Saddam because he had lost a lot of money in this conversion. Yet they
were very surprised when he recuperated his losses within less than
a year period due to the valuation of the Euro. The American administration
became aware of the threat when central banks of many countries started
keeping Euros along side of Dollars as their monetary reserve and as
an exchange fund for oil (Russian and Chinese central banks in 2003).
To avoid economical collapse the Bush administration hastened to invade
and to destroy Iraq under false excuses to make it an example to any
country who may contemplate dropping the Dollar, and to manipulate OPECs
decisions by controlling the second largest oil resource. Iraqi oil
sale was reverted back to the petrodollar standard.
There is only one
technical obstacle concerning the use of a euro-based oil exchange system,
which 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.
Yet this did not stop Iran from requiring payments in the euro currency
for its European and Asian oil exports since spring 2003.
Irans determination
in using the petroeuro is inviting in other countries such as Russia
and Latin American countries, and even some Saudi investors especially
after the Saudi/American relations have weakened lately. This determination
had also invited an aggressive American political campaign using the
same excuses used against Iraq: WMD in the form of nuclear bomb, support
to terrorist Lebanese Hezbollah organization, and threat
to the peace process in the Middle East.
The question now
is what would the American administration do? Would it invade Iran as
it did Iraq? The American troops are knee-deep in the Iraqi swamp. The
global community except for Britain and Italy- is not offering
any military relief to the US. Thus an American strike against Iran
is very unlikely. Iran is not Iraq; it has a more robust military power.
Iran has anti-ship missiles based in Abu Mousa island that
controls the strait of Hermuz at the entrance of the Persian Gulf. Iran
could easily close the strait thus blocking all naval traffic carrying
gulf oil to the rest of the world causing a global oil crisis. The price
of an oil barrel could reach up to $100. The US could not topple the
regime by spreading chaos the same way it did to Mussadaqs regime
in 1953 since Iranians are aware of such a trick. Besides Iranians have
a patriotic pride of what they call their bomb.
America has resorted
to instigate and encourage its military bastard, Israel, to strike Iranian
nuclear reactors the way it did to Iraq. Leaked reports had revealed
that Israeli forces are training for such an attack expected to take
place next June. Israel is afraid of an Iranian bomb. Such an Islamic
bomb would threaten Israels military hegemony in the Middle East.
The bomb would extract some Israeli concessions and would create an
arm race that would gobble a lot of Israeli defense expenditure. Further
more the bomb would force the US to enter into negotiations with nuclear
Iran that may limit Israeli expanding ambitions.
Iran had invested
a lot of money and effort to obtain nuclear technology and would never
abandon it as evident in its political rhetoric. Unlike Iraq Iran would
not keep quiet of Israel strikes its nuclear facilities. Iran would
retaliate aggressively which may lead to the destabilization of the
whole region including Israel, Gulf States, Iraq, and even Afghanistan.
*Dr. Elias Akleh
is an Arab writer from a Palestinian descent, born in the town of Beit-Jala
and lives in the US.