Why OIL price is tied to the Dollar ?

[2uk]

I mean ,when the dollar is weakening OIL prices jump up ... if the dollar is strengthening.... oil prices seem to calm down...... We don't buy ****** oil in dollars ? Why are we impacted by this ? A pain in the arse in the US sinking straight down enjoyment ..

[expat]

I mean ,when the dollar is weakening OIL prices jump up ... if the dollar is strengthening.... oil prices seem to calm down...... We don't buy ****** oil in dollars ? Why are we impacted by this ? A pain in the arse in the US sinking straight down enjoyment ..

After the OPEC oil shock in the early 1970s, Henry Kissinger struck a deal with the Saudi Royal Family: the US would keep them in power, and in return, they (and OPEC) would price oil in US dollars.

Note: Saddam Hussein started selling Iraqi oil in euros instead, and he was gone in months.

[2uk]

After the OPEC oil shock in the early 1970s, Henry Kissinger struck a deal with the Saudi Royal Family: the US would keep them in power, and in return, they (and OPEC) would price oil in US dollars.

Note: Saddam Hussein started selling Iraqi oil in euros instead, and he was gone in months.

[ChimpMaster]

Oil is a hedge against currency devaluation. Not as much as gold, but the principal is pretty much the same.

[expat]

OPEC is at least as useful to the US govt as it is to the Arabs: it is the mechanism whereby oil stays priced in dollars, and therefore the US dollar remains the world's currency, and the US govt has a unique ability to print money and have other people pick up the tab, as the world has been doing for decades.

High oil prices are not really upsetting to a US president who is an oil millionaire.

Iran now sells oil to China in euros. This is a very dangerous thing to do, they are liable to experience regime change for that.

The Saudis have started allowing the dollar price to move around a bit, in such a way that the euro price is nearer to being steady. When asked, they maintain that the dollar price is "sufficiently stable". Even that is a risk for them, with Al Qaeda about. Al Qaeda and the US wanted Saddam Hussein out. They both got it. Al Qaeda wants the Saudi Royal Family out. I bet neither they nor Washington ever forget that.


That's what the oil price is about!

[BrilloPad]

I wonder if USD as the world reserve currency will end soon. What wil it be? Chinese currency presumably?

PS what is the Chinese currency anyway?

[gingerjedi]

I just bought 5 litres of castrol GTX for £24.99

[HairyArsedBloke]

Note: Saddam Hussein started selling Iraqi oil in euros instead, and he was gone in months.

The Iranians were wittering on about doing the same for years. They set up the Iranian Oil Bourse that opened earlier this year. Then there was that break in the internet cables in the area and since then it has disappeared without trace.

[HairyArsedBloke]

I wonder if USD as the world reserve currency will end soon. What wil it be? Chinese currency presumably?

PS what is the Chinese currency anyway?

1. Not likely
2. see above
3. No chance
4. Renminbi / Yuan ISO: CNY

[Paddy]

The Dollar is dying as an oil trading currency. Iraq chose to use the Euro but was stopped by the US after the invasion. Iran has started selling their oil on the Iranian Borse; they will only trade in Euros and Yen, this is the real reason the US wants to attack Iran. Russian is trading it’s oil in Euros, Rubbles and Dollars but they are trying to ditch the Dollar. Russia has started on on-line Borse this week so anyone one can trade their oil online.