Petrocurrency

Petrocurrency

Petrocurrency is a portmanteau neologism used with three distinct meanings, though often confused:
#Trading surpluses of oil producing nations, originally called petrodollars
#Currencies of oil producing nations which tend to rise in value against other currencies when the price of oil rises (and fall when it falls).
#Currencies used as a unit 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 funds. Two early examples were the Kuwait Investment Authority and the Petroleum Fund of Norway.

Currencies correlated with oil prices

The pound sterling has sometimes been regarded as a petrocurrency thanks to North Sea oil exports. [ [http://www.cepr.org/pubs/Bulletin/meets/154.htm Sterling and the EMS In for a penny ] ] The Australian dollar does not fall in this category, since Australia 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 and Venezuela) have been pushing for a switch to the euro.

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 Russian president Vladimir Putin announced the project for the creation of an Oil Exchange denominated in rubles 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.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • petrocurrency — / petrəυkʌrənsi/ noun a foreign currency which is earned by exporting oil …   Dictionary of banking and finance

  • petrocurrency — petˈrocurrˈency, petˈromoney, petˈrodollars and petˈropounds noun Currency, etc, acquired by the oil producing countries as profit from the sale of their oil to the consumer countries • • • Main Entry: ↑petro …   Useful english dictionary

  • Petrodollar — A petrodollar is a U.S. dollar earned by a country through the sale of petroleum. The term was coined by Ibrahim Oweiss, a professor of economics at Georgetown University, in 1973. Oweiss felt there was a need for a word to describe a situation… …   Wikipedia

  • Currency — For other uses, see Currency (disambiguation). Coins and banknotes are the two most common forms of currency. Pictured are several denominations of the euro …   Wikipedia

  • List of economics topics — This aims to be a complete list of the articles on economics. It does not include articles about economists, who are listed in the list of economists. NOTOC A * Accounting Accounting reform Actuary Adaptive expectations Adverse selection Agent… …   Wikipedia

  • Central Bank and Financial Services Authority of Ireland — Infobox Central bank bank name in local = Banc Ceannais agus Údarás Seirbhísí Airgeadais na hÉireann ga icon image 1 = CBFSAI IRELAND.png image title 1 = Logo image width 1 = 249 image 2 = image title 2 = headquarters =Dublin, Ireland president …   Wikipedia

  • Topic outline of economics — For a more comprehensive list, see the List of economics topics. Economics, is the social science that studies the production, distribution, and consumption of resources. By extension, economics also studies economies, the creation and… …   Wikipedia

  • Нефтевалюта — валюта, курс которой зависит от положения на рынке нефти. По английски: Petrocurrency См. также: Иностранная валюта Финансовый словарь Финам …   Финансовый словарь

  • Outline of economics — The following outline is provided as an overview of and topical guide to economics: Economics – analyzes the production, distribution, and consumption of goods and services. It aims to explain how economies work and how economic agents interact.… …   Wikipedia

  • Petrodollars — The money that oil exporters receive from selling oil and then deposit into Western banks. Petrodollars are also known as petrocurrency. Petrodollars refers to the money that Middle Eastern countries and members of OPEC receive as revenue from… …   Investment dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”