Oil should be priced in Euros Apr03

The eurozone is the biggest importer of oil in the world yet oil trading on the world market still takes place mainly in US dollars.

Oil rich Arab countries have huge liquid and real assets in the USA, however, these  investments have given them little political influence over US policy in securing peace in the Middle East. If oil was partly issued in Euros, some of this investment would flow into the EU, creating new jobs and giving a huge boost to the Eurozone economies. Investment builds good trading relations and similarly, good economic partnerships are able to influence politics. The EU would consequently be a stronger broker for settling many disputes that have set the Middle East ablaze.

The oil rich nations could sell their oil to the USA in US$, to the EU in Euros and in either currency to the rest of the world. This would allow them to invest both in the USA and Europe increasing their influence with both power blocks. The Arab countries, in particular, would gain substantial influence in the UN, in Washington and the EU capitals. Oil trading in Euros would also boost and stabilise the Euro against the US$. European interest rates would fall and it is likely that a parity would be achieved and maintained for the two major world currencies.

Let us hope that the EU will take a lead in persuading the oil rich nations in the Middle East to formulate a scheme for the purchase of oil in Euros. This would end economic stagnation in the EU, kick-start genuine negotiations in securing a just settlement in Palestine and remove the root cause of terrorism.