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Venezuela requires Euros for some oil contracts
by Open-Publishing - Saturday 15 March 20081 comment
Trade-Exchange Rates Energy South/Latin America
Venezuela requires Euros for some oil contracts
Fri Mar 14, 2008 1:30pm EDT
CARACAS, March 14 (Reuters) - Venezuela is requiring payments in euros on some contracts for crude, oil product and spot sales, Energy Minister Rafael Ramirez told Reuters on Friday.
The move to have some of its contracts in euros is a sign OPEC-member Venezuela could be easing away from the plummeting dollar — the standard currency for the oil industry.
The South American producer had no set target for the amount of crude to be paid in euros, Ramirez said on the sidelines of a political party rally.
Venezuela’s President Hugo Chavez, a fierce U.S. adversary, has often criticized Washington for allowing the dollar to slump and wants OPEC nations to consider switching oil pricing to a basket of currencies to improve their purchasing power.
Analysts attribute record-high oil prices above $110 a barrel to the steadily weakening dollar, which has plummeted due to the slumping U.S. economy and large interest rate cuts.
Left-winger Chavez last year promoted the idea of changing oil pricing at an OPEC meeting in U.S. ally Saudi Arabia, but with the influential hosts objecting the proposal, the measure found little support among other members. (Reporting by Brian Ellsworth in Caracas, writing by Patrick Markey in Bogota; Editing by Marguerita Choy)
Forum posts
7 April 2008, 04:17, by 017
By requiring that contracts be paid in euros, this is enevitably going to make Venezuela a target of the US. Before invading Iraq, the US government got word that Sadam Hussein was doing the same thing, which further put the value of the US dollar at risk, as well as somewhat violating a little known ’agreement’ amongst OPEC Nations that oil dealings be done exclusively in US currency. There has been endless talk that the threat of terrorism and the WMD fiasco were nothing more than a cover for the US to invade and take over so that they may stop Hussein from continuing on this path. As soon as US troops secured their place in Iraq, the oil contracts were immediately transfured back to US dollars. The more nations that are beginning to take this route, the more nations the US seems to be paying particlar attention to as threats. Iran is also currently on this list of oil producing nations that are transferring their private contracts to the Euro, and look at how much (aggressive) attention the US is paying to them. How much can you truely fault a nation for trying to secure their economy by the best possible means? I guess enough to search for other things that would "justify" military action against such a nation. We’ve seen it happen a lot lately, Venezuala will be no different, and the US will not feel the need to search very hard to find a threat there, as Venezuala and US relations have been so strained already. Maybe this a unified attempt by US enemies to further collapse the dollar, but it leaves the doors wide open for misguided US opperations against these nations, which I believe the US will use to their full advantage.Threats, war, death, misinformation. It’s all about the Benjamin’s baby.