- Petrocurrency
Petrocurrency is a
portmanteau neologism used with three distinct meanings, though often confused:
#Trading surpluses of oil producing nations, originally calledpetrodollar s
#Currencies of oil producing nations which tend to rise in value against other currencies when theprice of oil rises (and fall when it falls).
#Currencies used as aunit of account to price oil in the international market.Oil producers' trading surpluses
With the large rise in oil prices in the 1970s, there was concern that the world economy might contract if the oil producers extracted money and failed to recycle it back to oil consumers.
With a similar rise in prices at the start of the 21st century, more of these oil surpluses have been reinvested through
sovereign wealth fund s. Two early examples were theKuwait Investment Authority andthe Petroleum Fund of Norway .Currencies correlated with oil prices
The
pound sterling has sometimes been regarded as a petrocurrency thanks toNorth Sea oil exports. [ [http://www.cepr.org/pubs/Bulletin/meets/154.htm Sterling and the EMS In for a penny ] ] TheAustralian dollar does not fall in this category, sinceAustralia does not export a significant amount of oil.The
Canadian dollar is increasingly viewed as a petrocurrency. As the price of oil rises, oil-related export revenues rise, and thus constitute a larger component of Canadian exports. Thus, the movements of the Canadian dollar have become increasingly correlated with price of oil. For example, the exchange rate of Canadian dollars for Japanese yen (99% of Japan's oil is imported) is 85% correlated with crude prices.Currencies used to trade oil
Since the agreements of 1971 and 1973, OPEC oil is exclusively quoted in US dollars. This created a permanent demand for dollars on the international exchange markets.ref label|dollarcollapse|4|d As of 2005, OPEC continues to trade in petrodollars, but some OPEC members (such as
Iran andVenezuela ) have been pushing for a switch to theeuro .Since the beginning of 2003, Iran has required euro in payment of exports toward Asia and Europe, though prices are still expressed in US dollars [http://www.globalresearch.ca/articles/CLA410A.html] . Iran is planning to open an International Oil Bourse (IOB, exchange), on the free trade zone on the island of Kish ref label|irandailykish|2|b, for the express purpose of trading oil priced in other currencies, including euro.
On May 10, 2006
Russia n presidentVladimir Putin announced the project for the creation of an Oil Exchange denominated inrubles to trade oil and gas. The purpose of trading in rubles is to convert it into an international currency which would also be used to pay other commodities and goods. The Oil Exchange would operate from 2007 and will give rise to the petroruble as those countries that buy oil and gas from Russia will have to acquire them and use it as reserve. [ [http://en.rian.ru/russia/20060522/48444227.html RTS bourse to launch domestic oil futures at start of 2007] , May 22, 2006] [ [http://en.rian.ru/russia/20060510/47915635.html Putin proposes creation of ruble-denominated oil, gas exchange] , May 10, 2006.] [ [http://www.en.rian.ru/russia/20060421/46778404.html Dollar too unstable to be reliable - Russian minister] . April 21, 2006.] [ [http://www.informationclearinghouse.info/article13141.htm Vladimir Putin and the rise of the petro-ruble] ]Referencies
# [http://www.studien-von-zeitfragen.net/Zeitfragen/__Collapse_in_Iran/__collapse_in_iran.html] ,
# [http://republic-news.org/archive/120-repub/120_crawford.htm The Iranian line in the sand] , Dan Crawford, The Republic (Vancouver ),August 18 to 31,2005
# [http://www.iran-daily.com/1383/2199/html/economy.htm Kish Oil Exchange Planned] ,Iran Daily ,January 24 ,2006
# [http://www.atimes.com/atimes/Middle_East/HC22Ak01.html A frenzied Persian new year] ,March 22 ,2006 ,Asia Times ee also
*
Ecocurrency
*Petrodollar
*Petrodollar warfare
*Petrobourse
* [http://www.petrotalk.com PetroTalk.com] Portal for petro related Articles, Discussion, Links and more
Wikimedia Foundation. 2010.