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Iran and China are working towards partnerships – would benefit by offsetting US pressures on each

A weekend report from the Wall Street Journal on mooted wide ranging partnership discussion by the two countries:

  • China would benefit from Iranian oil
  • Iran would get Chinese investment
Iran and China partnering up would deflect US pressures and influence on both.
WSJ goes on:
  • An initial draft of the Iran-China deal still requires Iranian parliamentary approval
  • under a 25-year partnership, China would import “sustainable” levels of Iranian oil, but offered no further details
Here is the link for more (may be gated).

iran china

Iran to boost uranium enrichment to over 3.67% on Sunday – FARS

Report from the Iranian news agency

There is always talk about Iran and nuclear weapons and the market doesn’t usually react. Why? Because it’s all scare tactics.
Uranium needs to enriched to around 90%.
From Wikipedia:
“Uranium as it is taken directly from the Earth is not suitable as fuel for most nuclear reactors and requires additional processes to make it usable. Uranium is mined either underground or in an open pit depending on the depth at which it is found. After the uranium ore is mined, it must go through a milling process to extract the uranium from the ore. This is accomplished by a combination of chemical processes with the end product being concentrated uranium oxide, which is known as “yellowcake”, contains roughly 60% uranium whereas the ore typically contains less than 1% uranium and as little as 0.1% uranium. After the milling process is complete, the uranium must next undergo a process of conversion, “to either uranium dioxide, which can be used as the fuel for those types of reactors that do not require enriched uranium, or into uranium hexafluoride, which can be enriched to produce fuel for the majority of types of reactors”[3]. Naturally-occurring uranium is made of a mixture of U-235 and U-238. The U-235 is fissile meaning it is easily split with neutrons while the remainder is U-238, but in nature, more than 99% of the extracted ore is U-238. Most nuclear reactors require enriched uranium, which is uranium with higher concentrations of U-235 ranging between 3.5% and 4.5%.”

Ten Simple Facts about OIL

Oil_barrel_standard1) Oil is priced in dollars.
2) Oil trades in Dollars and Euros right now in spite of the pricing unit being dollars. OPEC has recently admitted this fact.
3) Clearly oil does not have to be priced in Euros to trade in Euros, or for that matter priced in Yen to trade in Yen. The same applies to any major currency.
4) Neither Venezuela or Iran hold any dollar reserves. To the extent that either is taking trades in dollars, there is clearly nothing forcing them to hold dollars. By extension there is nothing forcing any OPEC country to hold dollars if it doesn’t want to.
5) It takes less than a second for Forex trades to take place. 24 hours a day, 7 days a week, one can sell any currency they want and buy any other currency.
6) The above logic applies to any currency and any commodity.
7) Nothing is stopping anyone at any time anywhere from selling dollars for whatever currency they want to hold. Nor is anything stopping anyone anywhere at any time from selling any major currency for U.S. Dollars.
8) Because currency conversion is instantaneous no one has to hold U.S. dollars to buy oil, copper, gold, iron, lead, wheat, soybeans, or anything else.
9) Dollars are held (or not held) for reasons totally unrelated to pricing unit. Some of those reasons are political, some are based on sentiment, some on trade patterns and trade relationships, and some to suppress the value of local currencies to improve exports.
10) Currencies float and so do the price of oil and commodities. Pricing oil (or any other commodity) in Euros will not cause a price change in dollars. Look at gold which is simultaneously priced in everything as proof.