Iran’s president Mahmud Ahmadinejad said out loud what OPEC members have been discussing in closed doors (with an open mic, by accident). According to Ahmadinejad OPEC should stop selling and pricing oil in dollars as a result of the continuing weakness of the currency. Further more, OPEC members have experienced interest in converting reserves to other currencies.
Ahmadinejad’s remark actually resulted in increased negative pressure on the American currency. Iran is walking a very tight rope signaling possible retaliations to US imposed sanctions due to its nuclear program.
The impact of OPEC converting to the Euro as a working currency is hard to predict. Oil is a commodity as any other. Commodity pricing should not change as a result of changing a currency. However pricing oil in euros combined with a continuing weakness of the US dollar will eventually result in higher oil prices which should up the pressures in the US for alternatives to fossil fuels. Is this a blessing in disguise?