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Originally Posted by aceventura3
Citizens don't care if foriegn oil trades in euros, yens or dollars. Exchange rates will determine the price consumers pay. Oil companies and oil producing countries hedge against currency fluctuations. Many people (individuals, hedge funds, corps, governments, warren Buffet, etc) make billions trading currencies and currency futures.
If I controlled a tanker of oil I would sell it using the most profitable currency at the time of the sale. However being less of a risk taker today I would hedge at about $70. But it seems for some reason Iran doesn't want to trade in dollars even if it made them more money depending on market conditions.
Conspiricy Theory Alert - If Iran wants to lock everyone into using any currency but American dollars (limiting his choices needlessly) it indicates that Iran doesn't want to get caught with US dollars - which is another indicator Iran may be preparing for war.
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Citizens might not care, but it does effect them and Iran knows that the dollar is approaching it's intrinsic value (which is literally the paper it's printed on). Gold at 700, oil at 70, prices aren't neccessarily going up so much as the dollar is going down. Foreign countries are ditching the dollar because they no longer want to trade in currency that is being printed at will, and because our country has fewer and fewer assets to offer the rest of the world.
As more countries drop the dollar, our national debt is going to become a serious problem real fast. Maybe that's a more significant reason Iran is seen as a threat, once again it's about oil and money, not nukes.