On Sept. 5, officials in Iran reported that they will be opening up two new banks in Munich, Germany with the purpose of getting a foothold in Europe’s financial arena so that by the end of the year they can start selling oil to the continent in Euros rather than dollars.
Even prior to the decade’s long sanctions imposed upon them by the United Nations and United States, Iran had not had any financial influence in Europe since the 1979 Revolution that brought about the creation of an Islamic State. But as the OPEC nation begins a new chapter following Washington’s removal of many of their imposed restrictions, the Middle Eastern oil giant is working to ensure that they will never again be subject to dollar hegemony and further uses of the currency as a means of economic warfare against them.
Two private Iranian banks will open branches in Munich, officials confirmed Monday, as the Islamic republic looks for ways around ongoing barriers to international financing. The central bank announced late on Sunday that Middle East Bank and Sina Bank would set up in Germany’s Bavaria state, following a visit by local economy minister Ilse Aigner to Tehran. “This is a first since the revolution of 1979. We hope to open our branch by the end of 2016,” Parviz Aghili, director general of Middle East Bank, told AFP. Iran’s central bank is also now working with its German counterpart and several banks in the country to settle oil exports in euros. – Russia Today
Iran’s intentions mark the third oil producer to implement a system of selling their product in currencies other than the dollar. Back in 2013, Russia became the first by joining up with China to create partnerships that now see oil sales being done in both the Yuan and the Ruble.
Interestingly as well, Iran chose Germany rather than the City of London to get a financial foothold into Europe, especially since Britain controls the markets for Brent crude and most of Europe’s other oil production.
It has taken less than three years, but the end of the petrodollar system is now at hand. And with it may soon come the end of the dollar’s reign as the global reserve currency when you add in China’s ongoing plans for expanding the SDR internationally within the next 30-60 days.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.