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After consensus on abolition of the US dollar, European nations to conduct oil trade with Iran in Euros

Brussels – The European nations have prepared to retaliate against the harsh sanctions imposed by the United States against Iran. A decision has been taken that the European nations would continue to deal in oil with Iran without paying any heed to the United States’ sanctions. Moreover, they would also banish the US dollar from the oil trade and rather transact in Euros. Some news agencies have revealed this information based on their sources. The statement made by the chief of foreign policy of the European Union, Federica Mogherini, endorses the claims made by these sources. The United Kingdom, Germany, France, European Union and Iran have arrived at a consensus to find a workable alternative to the United States’ sanctions, said Mogherini.

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Withdrawing from the Iran nuclear deal, President Trump has imposed strict sanctions against Iran. These sanctions will affect the companies and countries transacting with Iran. This could lead to heavy losses for the United Kingdom, France, Germany and the European Union, who have investments and trade agreements with Iran. Therefore, these countries had made frantic efforts to convince the United States that it should not withdraw from the nuclear deal. The decision of the United States, taken in spite of these efforts, is being heavily criticised by the United Kingdom, France, Germany and the European Union.

Jean-Claude Juncker, the President of the European Commission has appealed that the European Union must take the place of the United States. During a meeting held at Brussels on Tuesday, chief of foreign policy at the European Union, Federica Mogherini claimed that United Kingdom, Germany, France, European Union and Iran have arrived at a consensus to find a workable solution to circumvent the United States’ sanctions. Mogherini did not reveal any details about the solutions that were being considered, but she clarified that the European Union was not under any illusion that it could sever ties with the United States on this issue.

Although, Mogherini has adopted a cautious stand on the issue, the earlier statements made by Juncker and the position taken by the United Kingdom, France and Germany to support the nuclear treaty with Iran, point towards a different story. Some leading news agencies have reported that a decision has been taken about transacting with Iran in Euros and not in US dollars, for the fuel trade. This news report, based on sources, can create great upheavals in the near future. Russia and China have taken decisions to challenge the US Dollar’s monopoly as an international currency. Now, if the European Union also starts transacting with Iran in Euros, it can have serious repercussions.

The US Dollar emerged as an international currency since the time when it came into use as the only currency in oil transactions and gained a new identity – the ‘Petrodollar’. This has given the United States tremendous control over the world economy. Analysts claim that anybody who tried to challenge this monopoly was decimated by the United States. Analysts refer to the fact that when the Iraqi dictator Saddam Hussain had decided to conduct oil trade in Euros instead of US dollars, the United States had attacked Iraq and the Saddam regime was overthrown.

On this background it seems impossible that the US will tolerate the attempts of the European nations to directly challenge the US dollar and weaken its position as an international currency. This could result in the ties between the United States and the European nations to snap under the strain. At the same time, there are indications that Iran, who is encouraging this trade, will face even harsher action from the United States.