William Clark
The Real Reasons Why Iran is the Next Target:
Fri Nov 19, 2004 17:00
64.140.158.1

The Real Reasons Why Iran is the Next Target:
The Emerging Euro-denominated International Oil Marker

by William Clark, http://globalresearch.ca/articles/CLA410A.html

The Iranians are about to commit an "offense" far greater than Saddam
Hussein's conversion to the euro of Iraq's oil exports in the fall of 2000.

The Tehran government has a developed a plan to begin competing with New
York's NYMEX and London's IPE with respect to international oil trades -
using a euro-based international oil-trading mechanism. This means that
without some form of US intervention, the euro is going to establish a firm
foothold in the international oil trade. Given U.S. debt levels and the
neoconservative project for U.S. global domination, Tehran's objective
constitutes an obvious encroachment on US interests in the oil market.

Of all the enemies to public liberty war is, perhaps, the most to be dreaded
because it comprises and develops the germ of every other. War is the parent
of armies; from these proceed debts and taxes...known instruments for
bringing the many under the domination of the few. . . No nation could
preserve its freedom in the midst of continual warfare." - James Madison

Madison's words of wisdom should be carefully considered by the American
people and world community. The rapidly deteriorating situation on the
ground in Iraq portends an even direr situation for American soldiers and
the People of the world community - should the Bush administration pursue
their strategy regarding Iran. Current geopolitical tensions between the
United States and Iran extend beyond the publicly stated concerns regarding
Iran's nuclear intentions, and likely include a proposed Iranian "petroeuro
system" for oil trade. Similar to the Iraq war, upcoming operations against
Iran relate to the macroeconomics of the `petrodollar recycling' and the
unpublicized but real challenge to U.S. dollar supremacy from the euro as an
alternative oil transaction currency.

It is now obvious the invasion of Iraq had less to do with any threat from
Saddam's long-gone WMD program and certainly less to do to do with fighting
International terrorism than it has to do with gaining control over Iraq's
hydrocarbon reserves and in doing so maintaining the U.S. dollar as the
monopoly currency for the critical international oil market. Throughout 2004
statements by former administration insiders revealed that the Bush/Cheney
administration entered into office with the intention of toppling Saddam
Hussein. Indeed, the neoconservative strategy of installing a pro-U.S.
puppet in Baghdad along with multiple U.S. military bases was partly
designed to thwart further momentum within OPEC towards a "petroeuro."
However, subsequent events show this strategy to be fundamentally flawed,
with Iran moving forward towards a petroeuro system for international oil
trades, while Russia discusses this option.

Candidly stated, 'Operation Iraqi Freedom' was a war designed to install a
pro-U.S. puppet in Iraq, establish multiple U.S military bases before the
onset of Peak Oil, and to reconvert Iraq back to petrodollars while hoping
to thwart further OPEC momentum towards the euro as an alternative oil
transaction currency. In 2003 the global community witnessed a combination
of petrodollar warfare and oil depletion warfare. The majority of the
world's governments - especially the E.U., Russia and China - were not
amused - and neither are the U.S. soldiers who are currently stationed in
Iraq.

Indeed, the author's original pre-war hypothesis was validated shortly after
the war in a Financial Times article dated June 5th, 2003, which confirmed
Iraqi oil sales returning to the international markets were once again
denominated in US dollars, not euros. Not surprisingly, this detail was
never mentioned in the five US major media conglomerates who appear to
censor this type of information, but confirmation of this vital fact
provides insight into one of the crucial - yet overlooked - rationales for
2003 the Iraq war.

"The tender, for which bids are due by June 10, switches the transaction
back to dollars -- the international currency of oil sales - despite the
greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq's oil
be sold for euros, a political move, but one that improved Iraq's recent
earnings thanks to the rise in the value of the euro against the dollar."[3]
Unfortunately, it has become clear that yet another manufactured war, or
some type of ill-advised covert operation is inevitable under President
George W. Bush, should he win the 2004 Presidential Election. Numerous news
reports over the past several months have revealed that the neoconservatives
are quietly - but actively - planning for the second petrodollar war, this
time against Iran.

"Deep in the Pentagon, admirals and generals are updating plans for possible
U.S. military action in Syria and Iran. The Defense Department unit
responsible for military planning for the two troublesome countries is
"busier than ever," an administration official says. Some Bush advisers
characterize the work as merely an effort to revise routine plans the
Pentagon maintains for all contingencies in light of the Iraq war. More
skittish bureaucrats say the updates are accompanied by a revived campaign
by administration conservatives and neocons for more hard-line U.S. policies
toward the countries"."Even hard-liners acknowledge that given the U.S.
military commitment in Iraq, a U.S. attack on either country would be an
unlikely last resort; covert action of some kind is the favored route for
Washington hard-liners who want regime change in Damascus and Tehran."
.administration hawks are pinning their hopes on regime change in Tehran -
by covert means, preferably, but by force of arms if necessary. Papers on
the idea have circulated inside the administration, mostly labeled "draft"
or "working draft" to evade congressional subpoena powers and the Freedom of
Information Act. Informed sources say the memos echo the administration's
abortive Iraq strategy: oust the existing regime, swiftly install a pro-U.S.
government in its place (extracting the new regime's promise to renounce any
nuclear ambitions) and get out. This daredevil scheme horrifies U.S.
military leaders, and there's no evidence that it has won any backers at the
cabinet level." [4]

To date, one of the more difficult technical obstacles concerning a
euro-based oil transaction trading system 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. However, since
the spring of 2003, Iran has required payments in the euro currency for its
European and Asian/ACU exports - although the oil pricing for trades are
still denominated in the dollar.[5]

Therefore, a potentially significant news development was reported in June
2004 announcing Iran's intentions to create of an Iranian oil Bourse. (The
word "bourse" refers to a stock exchange for securities trading, and is
derived from the French stock exchange in Paris, the Federation
Internationale des Bourses de Valeurs.) This announcement portended
competition would arise between the Iranian oil bourse and London's
International Petroleum Exchange (IPE), as well as the New York Mercantile
Exchange (NYMEX). It should be noted that both the IPE and NYMEX are owned
by U.S. companies.

The macroeconomic implications of a successful Iranian Bourse are quite
noteworthy. Considering that Iran has switched to the euro for its oil
payments from E.U. and ACU customers, it would be logical to assume the
proposed Iranian Bourse will usher in a fourth crude oil marker -
denominated in the euro currency. Such a development would remove the main
technical obstacle for a broad-based petroeuro system for international oil
trades. From a purely economic and monetary perspective, a petroeuro system
is a logical development given that the European Union imports more oil from
OPEC producers than does the U.S., and the E.U. accounts for 45% of imports
into the Middle East (2002 data).

Acknowledging that many of the oil contracts for Iran and Saudi Arabia are
linked to the United Kingdom's Brent crude marker, the Iranian bourse could
create a significant shift in the flow of international commerce into the
Middle East. If Iran's bourse becomes a successful alternative for oil
trades, it would challenge the hegemony currently enjoyed by the financial
centers in both London (IPE) and New York (NYMEX), a factor not overlooked
in the following article:

"Iran is to launch an oil trading market for Middle East and OPEC producers
that could threaten the supremacy of London's International Petroleum
Exchange." ".He played down the dangers that the new exchange could
eventually pose for the IPE or Nymex, saying he hoped they might be able to
cooperate in some way."

".Some industry experts have warned the Iranians and other OPEC producers
that western exchanges are controlled by big financial and oil corporations,
which have a vested interest in market volatility.

The IPE, bought in 2001 by a consortium that includes BP, Goldman Sachs and
Morgan Stanley, was unwilling to discuss the Iranian move yesterday. "We
would not have any comment to make on it at this stage," said an IPE
spokeswoman." [6]

It is unclear at the time of writing, if this project will be successful, or
could it prompt overt or covert U.S. interventions - thereby signaling the
second phase of petrodollar warfare in the Middle East. News articles in
June 2004 revealed the discredited neoconservative sycophant Ahmed Chalabi
may have revealed his knowledge to Iran regarding U.S. military planning for
operations against that nation.

"The reason for the US breakup with Ahmed Chalabi, the Shiite Iraqi
politician, could be his leak of Pentagon plans to invade Iran before
Christmas 2005, but the American government has not changed its objective,
and the attack could happen earlier if president George W. Bush is
re-elected, or later if John Kerry is sworn in." "..Diplomats said Chalabi
was alerted to the Pentagon plans and in the process of trying to learn more
to tell the Iranians, he invited suspicions of US officials, who
subsequently got the Iraqi police to raid the compound of his Iraqi National
Congress on 20 May 2004, leading to a final break up of relations."

"While the US is uncertain how much of the attack plans were leaked to Iran,
it could change some of the invasion tactics, but the broad parameters would
be kept intact." [7]

Regardless of the potential U.S. response to an Iranian petroeuro system,
the emergence of an oil exchange market in the Middle East is not entirely
surprising given the domestic peaking and decline of oil exports in the U.S.
and U.K, in comparison to the remaining oil reserves in Iran, Iraq and Saudi
Arabia. According to Mohammad Javad Asemipour, an advisor to Iran's oil
ministry and the individual responsible for this project, this new oil
exchange is scheduled to begin oil trading in March 2005.

"Asemipour said the platform should be trading crude, natural gas and
petrochemicals by the start of the new Iranian year, which falls on March
21, 2005. He said other members of the Organization of Petroleum Exporting
Countries - Iran is the producer group's second-largest producer behind
Saudi Arabia - as well as oil producers from the Caspian region would
eventually participate in the exchange." [8]

Furthermore, according to the following report, Saudi investors may be
interested in participating in the Iranian oil exchange market, further
illustrating why petrodollar hegemony is becoming unsustainable.

Chris Cook, who previously worked for the IPE and now offers consultancy
services to markets through Partnerships Consulting LLP in London,
commented: "Post-9/11, there has also been an interest in the project from
the Saudis, who weren't interested in participating before." "Others
familiar with Iran's economy said since 9/11, Saudi Arabian investors are
opting to invest in Iran rather than traditional western markets as the
kingdom's relations with the U.S. have weakened Iran's oil ministry has made
no secret of its eagerness to attract much needed foreign investment in its
energy sector and broaden its choice of oil buyers."

".Along with several other members of OPEC, Iranian oil officials believe
crude trading on the New York Mercantile Exchange and the IPE is controlled
by the oil majors and big financial companies, who benefit from market
volatility." [9]

One of the Federal Reserve's nightmares may begin to unfold in March 2005,
when it appears international buyers will have a choice of buying a barrel
of oil for $50 dollars on the NYMEX and IPE - or purchase a barrel of oil
for ?40 euros via the Iranian bourse. Assuming of course that the euro
maintains its current 20% appreciated value relative to the dollar - and
assuming that some sort of "intervention" is not undertaken against Iran.
The upcoming bourse will introduce petrodollar versus petroeuro currency
hedging, and fundamentally new dynamics to the biggest market in the world -
global oil and gas trades.

During an important speech in April 2002, Mr. Javad Yarjani, an OPEC
executive, described three pivotal events that would facilitate an OPEC
transition to euros. [10] He stated this would be based on (1) if and when
Norway's Brent crude is re-dominated in euros, (2) if and when the U.K.
adopts the euro, and (3) whether or not the euro gains parity valuation
relative to the dollar, and the EU's proposed expansion plans were
successful. (Note: Both of the later two criteria have transpired: the
euro's valuation has been above the dollar since late 2002, and the
euro-based E.U. enlarged in May 2004 from 12 to 22 countries).

The implementation of the proposed Iranian oil Bourse (exchange) in
2005/2006 - if successful in utilizing the euro as its oil transaction
currency standard - essentially negates the necessity of the previous two
criteria as described by Mr. Yarjani regarding the solidification of a
"petroeuro" system for international oil trades. [10] It should also be
noted that during 2003-2004 Russia and China have both increased their
central bank holdings of the euro currency, which appears to be a
coordinated move to facilitate the anticipated ascendance of the euro as a
second World Reserve currency. [11] [12] In the meantime, the United Kingdom
is uncomfortable juxtaposed between the financial interests of the U.S. (New
York/Washington) banking nexus and that of the E.U. financial center
(Paris/Frankfurt).

The immediate question for Americans? Will the neoconservatives attempt to
intervene covertly and/or overtly in Iran during 2005 in an effort to
prevent the formation of a euro-denominated crude oil pricing mechanism?
Commentators in India are quite correct in their assessment that a U.S.
intervention in Iran is likely to prove disastrous for the United States,
making matters much worse regarding international terrorism, not to the
mention potential effects on the U.S. economy.


"The giving up on the terror war while Iran invasion plans are drawn up
makes no sense, especially since the previous invasion and current
occupation of Iraq has further fuelled Al-Qaeda terrorism after 9/11." ".It
is obvious that sucked into Iraq, the US has limited military manpower left
to combat the Al-Qaeda elsewhere in the Middle East and South Central Asia .
and NATO is so seriously cross with America that it hesitates to provides
troops in Iraq, and no other country is willing to bail out America outside
its immediate allies like Britain, Italy, Australia and Japan."

"If it [U.S.] intervenes again, it is absolutely certain it will not be able
to improve the situation - Iraq shows America has not the depth or patience
to create a new civil society - and will only make matters worse."