The Guardian 16 February, 2005

Oil behind the attacks on Iran

Behind the campaign of the United States to charge Iran over alleged preparations to make nuclear weapons, a charge that has already been rejected by the International Atomic Energy Agency (IAEA), is a far greater Iranian "crime" in the eyes of the US leaders. But this "crime" will never be even whispered by Bush, Condoleezza Rice, Rumsfeld and the others involved in the preparation for a new Middle East war.

William Clark, in an article published by the Centre for Research on Globalisation notes: "In 2005-2006 the Tehran government has a developed plan to begin competing with the New York Mercantile Exchange (NYMEX) and London's International Petroleum Exchange (IPE) with respect to international oil trades using a euro-denominated international trading mechanism". (It should be noted that both the IPE and NYMEX are owned by US corporations).

The oil and gas trade is the biggest market in the world and the establishment of an Iranian oil and gas trading centre "means that without some form of US intervention, the euro is going to establish a firm foothold in the international oil trade.

"It is now obvious that the invasion of Iraq had less to do with any threat from Saddam's long-gone weapons of mass destruction program and certainly less to do with fighting international terrorism than it has to do with gaining control over Iraq's hydrocarbon reserves and, in doing so, maintaining the US dollar as the monopoly currency for the critical international oil market", writes William Clark.

"'Operation Iraqi Freedom' was a war designed to install a pro-US puppet in Iraq, establish multiple US military bases before the onset of Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC (Organisation of Petroleum Exporting Countries) momentum towards the euro as an alternative oil transaction currency. (Note: Saddam Hussein had converted Iraqi oil transactions to euros some time before the US launched its "preventive" war. Iraqi oil is once again denominated in US dollars, not euros).

William Clark continues: "Unfortunately, it has become clear that yet another manufactured war, or some type of covert operation is inevitable under President Bush Numerous news reports have revealed that the neo-conservatives are quietly but actively planning for the second petrodollar war, this time against Iran.

"Since the spring of 2003 Iran has required payments in the euro currency for its European and Asian exports although the oil pricing for trades are still denominated in the dollar."

William Clark goes on: "The macroeconomic implications of a successful Iranian Bourse are noteworthy. Considering that Iran has switched to the euro for its oil payments from EU and Asian customers, it would be logical to assume the proposed Iranian Bourse will usher in a fourth crude oil marker denominated in the euro currency.

Another worrying aspect for the US is that Saudi investors "may be interested in participating in the Iranian oil exchange market, further illustrating why petrodollar hegemony is becoming unsustainable."

"It should also be noted that during 2003-2004 Russia and China have both increased their central bank holdings of the euro currency, which appears to be a coordinated move to facilitate the anticipated ascendance of the euro as a second world reserve currency".

In speculating on what the US leadership might do in the situation William Clark writes: "Pentagon sources confirm the Bush administration could undertake a desperate military strategy to thwart Iran's nuclear ambitions while simultaneously attempting to prevent the Iranian oil Bourse from initiating a euro-based system for oil trades. The latter would require forced 'regime change' and the US occupation of Iran ... Objectively speaking, the post-war debacle in Iraq has clearly shows that such Imperial policies will be a catastrophic failure.

"Unlike Iraq, Iran has a robust military capability. A repeat of any 'shock and awe' tactics is not advisable given that Iran has installed sophisticated anti-ship missiles on the Island of Abu Musa and therefore controls the critical Strait of Hormuz. In the case of a US attack, a shut down of the Strait of Hormuz where all of the Persian Gulf bound oil tankers must pass could easily trigger a market panic with oil prices skyrocketing to $100 per barrel or more ... Why are the neoconservatives willing to take such risks?"

William Clark quotes a Monterey Institute of International Studies report: "Considering the extensive financial and national policy investment Iran has committed to its nuclear projects, it is almost certain that an attack by Israel or the United States would result in immediate retaliation. A likely scenario includes an immediate Iranian missile counter-attack on Israel and US bases in the Gulf, followed by a very serious effort to destabilise Iraq and foment all-out confrontation between the United States and Iraq's Shi'i majority. Iran could also opt to destabilise Saudi Arabia and other Gulf States with significant Shi'i populations and induce the Lebanese Hezbollah to launch a series of rocket attacks on Northern Israel".

William Clark concludes: "Either way, US policy makers will soon face two difficult choices: monetary compromise or continued petrodollar warfare".

Acknowledgement to the Centre for Research on Globalisation (CRG) at The full article by William Clark can be accessed at

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