US plans to attack Iran - to protect oil market

March 12, 2006

The United States is once again looking to attack a Middle Eastern country, this time the republic of Iran. The reason given out is that Iran is planning to develop nuclear weapons. Nothing could be further from the truth.

The Iranians announced nearly two years ago that they would be opening an oil bourse; this was supposed to take place last year but was then put off to the spring of 2006. An oil bourse that would deal in euros.

And that is why the US is bothered.

To understand why it would affect America gravely, one needs to understand that oil is always bought and sold in dollars. The dollar is the default currency for international trade and all the oil traded in the world is bought and sold in one of two exchanges - New York's NYMEX and London's IPE. The latter is also owned by Americans.

As an illustration let's say India buys a million barrels of oil on the NYMEX. The Indians would pay in dollars. Let's assume the nation from which the oil is bought is Saudi Arabia. The Saudis would then use the dollars to buy commodities which their country needs to export. These dollars never go back to the US to be claimed as paper money.

Hence there is a vast amount of US currency lying around the world which other nations use - it would mean inflation of no ordinary scale if any part was claimed in the US.

If the dollar was ever dethroned as the currency of international trade, the American economy would collapse. The adventure in Iraq was borne out of desperation - Saddam Hussein had begun to sell oil for euros in the year 2000. Though many so-called experts (mostly Americans, no surprsie there) predicted that he would lose money, the euro rose from being worth 82 US cents to a value of $US1.25 by the time he was toppled.

It is important to note that once Iraq started selling oil again - what little it does - the sales are back to dollars, even though the country loses as a result.

Iran is one of fiver countries which can act as a swing producer - that is, affect the world oil pricing. (The others are Saudi Arabia, the UAE, Kuwait and Iraq). Hence if Iran set up an euro bourse for its oil, other countries which buy oil from Teheran would need to convert their dollars to euros. This would mean that dollars would come flooding back to the source. Inflation would soar in the US.

The nuclear bogey is a convenient one. Iran has not broken any of its commitments to the International Atomic Energy Agency. It has only gone back on some goodwill gestures which it had made to the troika of Germany, France and Britain.

The US National Intellignce Estimate has predicted that Iran will take at least a decade to develop any kind of nukes. Then why the US so eager to characterise the Iranians as being on the verge of developing nuclera weapons?

This is just another smokescreen and none of the corporate media will dare write about it. If the American economy is affected then there will be a domino effect among the other countries which are dependent on good news from Washington to keep their markets going.