The notion of pricing oil in something other than dollars has been around for some time. In fact, there’s been a bull market in predicting just that, motivated in recent years by the buck’s general descent in foreign exchange markets and the resulting financial pain the trend has imposed on foreign oil exporters. But rarely, if ever (as far as your editor can tell), has any high-ranking OPEC official discussed the idea in public in direct and transparent terms. Until now.
On Friday, OPEC Secretary-General Abdullah al-Badri told The
Middle East Economic Digest: “Maybe we can price the oil in the euro. It can be done, but it will take time,” according to AFP. He also observed via The Guardian: “In oil exchanges in New York, Singapore or Dubai, you can see the currency is the euro or the yen. But as long as we see the final sign in dollar, that means the pricing is in dollars. It took two world wars and more than 50 years for the dollar to become the dominant currency. Now we are seeing another strong currency coming into the [marketplace], which is the euro.”
Talking about pricing oil in something other than dollars is easy, of course. Doing it is something else entirely. The world’s oil market is still firmly tied into pricing crude in dollars, and changing the financial infrastructure will, as al-Badri said, take time–years, perhaps decades. At the same time, no one should dismiss the growing incentive to tackle this task, and where there’s a will there’s a way.