Iran Drops the Dollar

Think the news couldn't get any worse for George Bush as it relates to Iran?  Think again.  Iran has opted to stop accepting the US dollar as payment for oil.

From Google News:

Iran drops dollar from oil deals: report
7 hours ago

TEHRAN (AFP) — Major crude producer Iran has completely stopped carrying out its oil transactions in dollars, Oil Minister Gholam Hossein Nozari said on Saturday, labelling the greenback an "unreliable" currency.

"At the moment, selling oil in dollars has been completely halted, in line with the policy of selling crude in non-dollar currencies," Nozari was quoted as saying by the ISNA news agency.

"The dollar is an unreliable currency, considering its devaluation and the oil exporters' losses," he added.

Ouch.  It's sad, but true.  Have you tried to buy dinner or take a taxi in Europe lately?  It'll cost you a US arm and leg.

Still, the AFP article tries to save a little face:

The United States has in recent months successfully encouraged major European and Asian banks to cut their dealings with Iran in a bid to make the Islamic republic give way on its controversial nuclear programme.

Didn't the NIE say that Iran stopped their program in 2003?  I'm not quite sure what recent success they are referring to, but I haven't seen it.  Iran is selling oil by the boatload and laughing all the way to the non-US bank.

Perhaps this is a question for one of our resident economic experts, but what happens if other countries follow suit?  The article rightly points out that OPEC members are losing money because of their ties to the dollar:

The fall of the dollar, which has weakened considerably against the euro and other currencies in the past 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency.

What will happen to the US economy and the value of the dollar if OPEC follows suit?  Not because they want to join with Iran, but because they can't afford the cost of doing business with the dollar?

Am I wrong to think this could be longterm trouble for us?