Iran, Venezuela Concerned with Weak Dollar

OPEC summit, which is to be held this weekend, could become a field of discussion of possible dollar abandonment as the official OPEC’s oil currency. Iran and Venezuela, concerned with the dollars continuous fall against other world currencies, are interested in changing oil pricing to other major currencies.
Putting this question to the OPEC’s summit discussion list is in the interest of both of those countries. But Saudi Arabia, OPEC’s largest oil exporter and one of the closest U.S. allies in the Middle East, views such attempts as more harmful to the dollar than useful to OPEC members. Indeed, dropping dollar as the oil pricing currency will significantly decrease the demand of this currency, causing its collapse on the Forex market.
While Iran and Venezuela may have geopolitical reasons for dollar’s abandonment, most of OPEC countries are still strongly tied to dollar with a little or no diversification to other currencies. That said, dollar collapse is the last thing a country needs before diversifying its reserves to euros or pounds.
To make any changes to OPEC’s currency policy, Iran and Venezuela need to gain a major influence in this organization. But while they are considered as the marginal geopolitical bodies, it’s hardly can happen; other members will oppose any movements which are aimed mainly against U.S. than in the favor of OPEC countries. As Abdalla Salem el-Badri, Secretary-General of OPEC, said last Wednesday:

It was not in the declaration in the first place and it won’t be in the final declaration, period. It’s not Saudi Arabia’s position, it’s everybody’s position.


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