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Why are Oil prices in $US Dollars?

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    #32
    Kev_ps3
    Closed Accounts Posts: 3,604 ✭✭✭Kev_ps3


    meathstevie wrote: »
    The reason for oil being quoted in dollars is purely historical as far as I can determine. In the mid 20th century the only big strong economy with a sufficiently strong and stable currency was the US unless you were inclined the use USSR - Stalinist Rouble . Europe was only recovering from WWII with the USSR's cold war treath fairly lively on the border of West-Germany, Austria and Finland. Throw that in with the decolonisation troubles all over Africa and Asia and there's your explanation why the Dollar was the only realistic option. It's worth noting that the Dollar more or less took up the position Sterling left vacant as Brittain left the scene as a global super power.

    All these situations have changed now of course and Europe has never been as stable as it has been for the last decades and since it has a uniform currency as well now it could very well be that international commodity markets will shift to Euro in the near to mid-term future as the US is showing a lot of symptoms of a super power in decline. In fact the only thing the EU lacks to become a super power is a uniform foreign policy and a thorough military integration. Two things of which the development is in it's firts tentative stages.


    But there is one big difference between the US/Russia and Europe - Europe is made up of many individual countrys while the US and Russia are each one large counrty. There are steps to make Europe into one large country which is a disgrace imo, thats why I recommend a No vote on the Lisbon Treaty. Keep Ireland independant and not some state in some multi-country nightmare.


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