Iran Asks Japan to Pay Yen for Oil, Start Immediately

[Sindawe]

July 13 (Bloomberg) -- Iran asked Japanese refiners to switch to the yen to pay for all crude oil purchases, after Iran's central bank said it's cutting holdings of the U.S. dollar.

Iran wants yen-based transactions ``for any/all of your forthcoming Iranian crude oil liftings,'' according to a letter sent to Japanese refiners that was signed by Ali A. Arshi, general manager of crude oil marketing and exports in Tehran at the National Iranian Oil Co. The request is for all shipments ``effective immediately,'' according to the letter, dated July 10 and obtained by Bloomberg News.

The yen rose on expectations for an increase in demand for the currency to buy shipments from Iran, Japan's third-largest oil supplier. Central bankers in Venezuela, Indonesia and the United Arab Emirates have said they will invest less of their reserves in dollar assets because of the weakening currency, while the United Nations Security Council is preparing for another round of sanctions against Iran because of the nation's nuclear research.

``What else can Japan do but to accept the request, once the oil producer sent its wish?'' said Hirofumi Kawachi, an analyst at Mizuho Investors Securities Co. in Tokyo. ``The tensions between the U.S. and Iran are escalating, and it's Iran's measure to hedge risk.''

A spokesman for Iran's oil ministry in Tehran said he could neither confirm nor deny that the letter had been sent. Most Japanese oil refiners have until now used U.S. dollars to pay Iran for oil, said the spokesman, who declined to be identified by name because of government policy.

Continues at: http://www.bloomberg.com/apps/news?pid=20670001&refer=worldwide&sid=aLaColVYu5LA

This could get REAL interesting.  IIRC, the U.S. attacked Iraq shortly after they switched from the U.S. dollar for their oil payments.

[Paddy]

This could get REAL interesting.  IIRC, the U.S. attacked Iraq shortly after they switched from the U.S. dollar for their oil payments.

There is some speculation that is what triggered the invasion.  There is also a school of thought that 'petrodollars' (the world trading oil in U.S. dollars) artificially supports our standard of living.

I don't know how big an oil exporter Iran is, though.

[Manedwolf]

Oh, sh...

Well. Hopefully it's just them. There's a reason why the dollar is also referred to as the petrodollar, and we don't want that to stop.

If the Saudis and UAE make noises about using euros instead, then we worry.

[Headless Thompson Gunner]

There've been doom and gloom predictions about the petrodollar and the end of the United States economy for years.  None have come to pass.

Is there any reason why this is somehow different?

[Gewehr98]

Odd.

The U.S. has banned import of Iranian oil since 1995, when Clinton signed Executive Order #12959, which was renewed by George W. in March of 2004. 

A much more likely attack scenario would be Iran accumulating enough fissionables from their emerging nuclear weapons program to support at least one device.  We'd have to play referee in that event (again), because the attack wouldn't be led by the Americans. It would be an act of Israeli "pre-emptive self-defense".

Israel would be at the pointy end of the stick as soon as Mossad/CIA got the word that the Iranians were close to their goal, in a scene eerily reminiscent of Israel's previous attack on the Iraqi reactor at Osirak. Some think it'll happen sooner rather than later, because they've already asked the U.S. to provide CSAR support in the region for the Israeli Air Force - which we quickly and quietly declined. 

[charby]

US dollars for oil?  well I have heard gold prices are high(er) because Saudi Arabia is taking their oil money and buying gold because of a soft US dollar.