Amuzegar, Jahangir
July 1978
Foreign Affairs;Jul1978, Vol. 56 Issue 4, p740
The article presents the actions proposed by the members of the Organization of Petroleum Exporting Countries (OPEC) in response to the problem of the U.S. dollar devaluation. The schemes suggested for OPEC to deal with dollar depreciation are: a hike in the price of oil to compensate for the dollar's fall--proposed by Iraq, Kuwait and Venezuela, and supported in principle by Indonesia; and a switch from the dollar to a currency basket, or currency cocktail for the purpose of oil-pricing policy--advocated by Iraq, Qatar and the United Arab Emirates, and supported by Venezuela. Another suggested scheme to make up for dollar depreciation would be a shift to a basket of currencies as the basis for pricing crude oil. Other proposals discussed have had to do with: a revised Special Drawing Rights (SDR) basket in which the U.S. dollar would have a smaller weight, or would be eliminated in favor of the Swiss franc; a renewed Geneva II basket; and a four- or five-currency basket comprising the mark, yen, French franc, pound sterling, and Swiss franc. Oil pricing in terms of the SDR would benefit the oil exporters by: reducing fluctuations in oil earnings in terms of domestic currencies; increasing stability of petroleum revenues relative to import expenditures from non-hard currency sources, which account for more than 55 percent of OPEC imports; and enhancing the bargaining position of OPEC vis-a-vis the oil companies by cutting the exchange risks that the latter must bear or hedge against because OPEC oil is paid for in U.S. dollars, but is sold in world markets in a mix of currencies. Under the amended Articles of Agreement of the International Monetary Fund (IMF), every country is free to choose its own exchange arrangements, i.e., to peg its monetary unit to another member's currency, or to a basket of currencies of its own choosing, or to the SDR; or not to peg, and to follow other procedures--subject only to an overall surveillance by the IMF.


Related Articles

  • Record high for Brent. Gibson, Jane // ICIS Chemical Business;4/24/2006, Vol. 1 Issue 16, p26 

    The article provides an analysis of the crude oil market condition as of April 24, 2006. With a premium factored in to the oil price for geopolitical risk, crude looks likely to remain high. Concerns that supplies of Iranian oil could be jeopardized by the stand-off between the West and Iran...

  • TIME'S UP FOR FUELWATCH. Lindhe, Jane // BRW;11/20/2008, Vol. 30 Issue 46, p19 

    The article reports on the Australian federal government's decision to walk away from its controversial petrol price-monitoring scheme, FuelWatch. The proposed scheme was defeated in the Senate. The opposition claims that the initiative was merely a public relations ploy by the government and...

  • Scheme for Oil Comprehensive Price Readjustment.  // China Chemical Reporter;4/16/2006, Vol. 17 Issue 11, p5 

    The article reports on the increase in the prices of oil products since March 26, 2006 in China according to the National Development and Reform Commission. Moderate subsidies for vulnerable groups and public welfare sectors will be established. Also to be imposed is a special income...

  • OIL FIRE. POWELL, BILL // Newsweek Global;12/26/2014, Vol. 163 Issue 25, p16 

    The article focuses on the challenges facing Russia amidst the steady decline in the price of oil and the devaluation of the ruble. Topics covered include a meeting between Igor Sechin, the chief executive of Russian oil producer Rosneft with Saudi Arabia's oil minister Ali al-Naimi to talk...

  • Another Pass-Through Bites the Dust? Oil Prices and Inflation. De Gregorio, José; Landerretche, Oscar; Neilson, Christopher // Economia;Spring2007, Vol. 7 Issue 2, p155 

    The article focuses on a study that investigated the evolution of the pass-through of changes in oil prices to general inflation for a broad number of countries in order to quantify the decline in the impact of oil price hikes on general price levels worldwide and to evaluate hypotheses that...

  • RESTRUCTURING THE WORLD ECONOMY: ROUND II. Chenery, Hollis B. // Foreign Affairs;Summer81, Vol. 59 Issue 5, p1102 

    This article presents a dissenting and more optimistic view of the prospects for the world economy. It argues that the energy transition is closer to completion than would appear from the behavior of oil markets, primarily because many countries at first resisted the necessary changes in...

  • Oil Price Outlook.  // UAE Oil & Gas Report;Q1 2008, p14 

    The article presents an outlook for the oil price in the U.S. from 2008 to 2011. Oil price has increased from $80 to $90 a barrel in October 2007. However, there was a period of sustained price strength throughout the spring of 2007 and the summer went on to deliver the breakthrough in September...

  • OVERHEATED AND THIRSTY. Van Wyngen, Gerry // BRW;3/3/2005, Vol. 27 Issue 8, p29 

    Reports on the rise of oil prices due to the surge of demand. Other factors that contributed to the rise of oil prices; Price of oil per barrel; International economic implication of the rising oil prices; Production performance of oil companies around the world; Implication of oil prices on...

  • After the Fall. Fattah, Hassan // New Republic;5/19/2003, Vol. 228 Issue 19, p11 

    The author offers observations on the effect of the loss of low Iraqi oil prices on the Jordanian economy following the end of major combat in the Iraq War. An oil tanker moored in the port of Aqaba was meant as an emergency measure in case oil supplies from Iraq were cut off during the...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics