Can Iraqi oil be sold in currencies other than the dollar?
Can Iraqi oil be sold in currencies other than the dollar?
2-5-2024
Economic researcher, Ziad Al-Hashimi, commented on the reality of demands to sell oil in currencies other than the dollar.
Al-Hashemi said in a post on the “X” platform, followed by “Jarida”, that “there are emotional parliamentary and non-parliamentary demands demanding that the Iraqi government sell oil in currencies other than the dollar.”
Regarding the logic and realism of these demands, the economic researcher explains, “Theoretically, Iraq and other countries can sell their oil exports in any currency other than the dollar. This is a sovereign decision for the state and it has the freedom to make it, but oil is an economic and political weapon that has a direct impact on the global economy.” There is high sensitivity and caution when dealing with oil as an export commodity, as everything related to oil has international economic and even political repercussions.”
He added, “The global oil pricing currency is the dollar, and there is a strong connection between a barrel of oil and the US dollar, which after 1973 was determined by what is called the petrodollar, and any violation of this rule will incur very large losses to Iraq, which will go to exchange rate differences between the dollar and the rest of the currencies.”
Al-Hashimi stated, “The oil-producing countries sell their oil exclusively in dollars, to perpetuate their interests and strategic relations with the United States. Therefore, selling oil for anything other than the dollar is considered a kind of challenge or preparation to enter into a conflict or a state of war with the United States, and here we find that Iraq describes itself as a friend and even an ally of the United States, and its government has no desire to open a confrontation front with the Americans.”
He continued, “The dollar is used to price, buy and sell approximately 60% of the volume of global trade, and this gives countries that receive the dollar great flexibility and strength in managing their trade and imports. When oil is sold in currencies other than the dollar, Iraq will lose this important advantage.”
The economic researcher concluded by saying, “The decision to abandon the sale of oil in dollars is a huge strategic decision that carries risks and wide political and economic consequences that could negatively affect the future of Iraq for decades to come. Therefore, it does not make sense to use this decision as a means of expressing anger at the Americans or As an emotional reaction to the Fed’s sanctions.
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