Petrodollars
Petrodollar is the slang term for the foreign exchange income that the oil- exporting countries generate from the export of oil and its settlement in US dollars . The word component Petro stands for petroleum (English petroleum ), cf. Petrochemicals .
background
Since the Second World War , the oil trade has been mainly settled in US dollars. The denomination is in US dollars per barrel . Particularly resource-dependent economies that generate petrodollars are Saudi Arabia , Iraq , Nigeria and Russia .
For the USA, the most widely traded reference oil ( oil marker ) is West Texas Intermediate (WTI), for Europe Brent , named after the North Sea oil field, and for Asia Dubai Fateh . Then there is the OPEC oil, which in turn is a basket of eleven different types of oil from which an averaged average is calculated. All four varieties have the US dollar as face value.
Consequences of dollar invoicing
Three meanings can be derived from the dollar billing of oil:
- Firstly, the great and constant dependence of the world economy on crude oil means that the exchange rate of each country against the US dollar is a decisive economic variable - after all, it influences a country's raw material prices to a large extent.
- Second, the almost exclusive dollar invoicing on the other hand causes the US central bank Federal Reserve to have an enormous amount of liabilities towards the oil-exporting countries, since these countries receive large stocks of dollars through oil exports.
- Third, the US Federal Reserve receives foreign exchange from the oil-buying nations in the amount of the oil purchase prices.
USA seigniorage income
Since most of the oil-exporting countries still lack a large number of interesting investment objects, a considerable proportion of the dollar stocks have always flowed back into the USA . This leads to the pleasant situation for the USA that firstly the country receives high seigniorage income (to put it simply: profit from printing money). The sustained strong capital imports from the oil countries lower the interest level in the USA, which favors investments.
Critics of globalization compare this to a bank that issues promissory notes, but which are then reinvested in the same bank by the creditors. The strong return of the dollar into the USA tends to drive inflation; the national debt of the United States and also the private debt of its citizens are considered worryingly high (see also budget crisis in the USA 2011 ).
Debt crisis of the 1980s
The oil states' profits, which have risen sharply as a result of the two oil crises , are not only exported to the USA and Europe, but also lead to high capital inflows in emerging and developing countries. Together with the insufficiently sustainable financial markets of the countries, the capital imports from the oil countries contributed to the debt crisis of many emerging and developing countries at the beginning of the 1980s, as the countries used the inflowing capital to a large extent for consumer activity and thus only partially generated the return promised to investors could.
This problem was exacerbated by the fact that high interest rates began in the industrialized countries in the early 1980s in order to stop inflationary tendencies. Since most of the loans granted had flexible interest rates, the loan costs rose sharply within a short period of time. This is often seen as the ultimate catalyst for the first debt crisis, which became apparent when Mexico went bankrupt in 1982.
Petroleum invoicing in Saudi Arabia
According to several studies, the United States agreed with Saudi Arabia in 1972/73 (one year after the official end of the gold convertibility of the US dollar) that Saudi Arabian oil would only be invoiced in US dollars. In return, the US would have given military support to Saudi Arabia. There is no official evidence of such an agreement.
At that time, Richard Nixon , US President . Henry Kissinger was his most important advisor on security and foreign policy. At that time, the USA endeavored to curb the influences or attempts at influence of the USSR in many countries around the world; Nixon operated a "twin pillar policy" (two-pillar policy) called policy, which was aimed at the Soviet influence in the Persian Gulf (especially in Iran and Saudi Arabia) curb.
Alternatives to the petrodollar
Petroeuro
The term Petroeuro is intended to express, analogously to “Petrodollar”, that trade in petroleum products is carried out in euros . It is a theoretical or conceptual term as the US dollar is currently the dominant currency.
In order to avoid an actual or perceived dependence on the USA , the most important single importer, but also to reduce the importance and value of the US currency, some countries have turned away from the US dollar and switched to the euro in the past made, for example Syria . The Iraq changed during the last years of the reign of Saddam Hussein on the euro but put under US leadership back to US dollars.
For March 2006, Iran planned to open its own oil exchange with the intention of trading exclusively in euros. As a result, it was speculated whether this could result in a euro-based price mechanism. In July 2007, the Iranian government demanded from its customers that they should no longer pay for Iranian oil in US dollars in the future. On February 17, 2008, the Iranian Oil Exchange was opened , based on the island of Kisch . Instead of euros, prices are mainly calculated in the local currency, the rial .
International petro-currency basket
In October 2009, the British newspaper The Independent reported that the Gulf States , Russia , the People's Republic of China , Japan and France were conducting secret negotiations to replace the US dollar as the oil trading currency with a currency basket made up of the Chinese yuan as a currency in crude oil trading to replace the euro , the Japanese yen , a new common currency of the Gulf states and gold . According to the newspaper, nine years are planned for the transition. "The project means that the oil price will no longer be set in US dollars ," the newspaper quoted Chinese banking circles in Hong Kong as saying. Saudi Arabia rejected the newspaper report, which would lead to the weakening of the dollar, as "absolutely wrong".
literature
- Cóilín Nunan: Petrodollar or Petroeuro? A new source of global conflict , in: Feasta Review , No. 2 (2002), pp. 125–129 ( PDF )
- Elitza Mileva, Nikolaus Siegfried: Oil market structure, network effects and the choice of currency for oil invoicing . ECB Occasional Paper 77, December 2007 ( PDF )
See also
Web links
Individual evidence
- ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Economic Theory , 2013, p. 304
- ↑ The end of the petro-dollar from: Wirtschaftswoche, September 7, 2013, last accessed on March 13, 2014
- ^ Rainer Sommer (2006): Iranian Oil Exchange: Nonsense or Threat for the Dollar Hegemony?
- ↑ Roham Alvandi: Nixon, Kissinger, and the Shah: the origins of Iranian primacy in the Persian Gulf ( Memento of 20 July 2013, Internet Archive ) (2012). Diplomatic history, 36 (2). pp. 337-372. ISSN 1467-7709 . doi : 10.1111 / j.1467-7709.2011.01025.x For the term "Twin Pillar" see pages 3, 24 and 36.
- ^ Toni Straka: Killing the dollar in Iran . In: Asian Times , August 26, 2005.
- ↑ “Japan pays Iranian crude oil in yen” , Rohstoffwelt , September 6, 2007.
- ^ First phase of Iran oil bourse inaugurated on Kish island IRNA , February 17, 2008.
- ^ "Saudi Arabia denies weakening of the dollar" ( Memento of October 11, 2009 in the Internet Archive ), Wirtschaftsblatt Österreich , October 6, 2009.