Fri Nov 11th, 2011 at 02:10:54 PM EST
Reuters kicked it off this morning.....
Greece turns to Iranian oil as default fears deter trade
Then Zero Hedge took up the running
Greek Lender of Last resort....Iran
A fascinating article by Reuters this morning really brings to bear the reality that Greece faces as lenders and trade creditors refuse to help (and why should they realistically) with energy needs.
The harsh reality that Iran (yes that nuclearized Iran) is the main provider of Greek oil needs surely puts into perspective what seemingly unlikely events can occur when a person, corporation, country, gets desperate.
Perhaps we should reflect the other way that while all the world's bankers and money-men refuse to lend Greece money, Iran has truly become the lender of last resort for Greek survival - as it strikes us that energy needs will/should trump a coupon payment any day.
Then we saw some typically creative comment from FT Alphaville
A Drachma-tic moment in Greek oil trading
Whatever the case, if Greece's other options for imports of crude are drying up, and given that European leaders have fanned the flames by not ruling out a Greek exit from the euro, isn't there a problem forming here? And won't it eventually start to impact other Greek commodity and trade deals too?
Of course, if the issue for other providers is really potential "drachma" exposure, then surely the sensible thing is to start developing a synthetic drachma derivative market sharpish.
Trade financiers could also start embedding drachma swap terms into current agreements (you know, just in case). What's more, if the agreements were further collateralised with Greek products -- say, pledging one barrel of refined product for every two barrels of crude imported (in the event euro payments could not be made), this could even help to stabilise the exchange rate if and when Greece was to pull out of the euro.
This is of particular interest to me since I have just returned from a very productive week in Iran - my fifth visit - where I was a plenary speaker at the annual oil ministry think tank conference.
Here's my presentation, outlining the inevitable collapse in the financialised crude oil price and a Transition through Gas
I spoke immediately after the OPEC Secretary General, and the 'Gas OPEC' (GECF) Secretary General, Leonid Bokhanovsky but before the (woman) Iranian Vice President.
My colleague and co-conspirator, Sam Barden - a Dubai-based Australian broker/trader with ten years' experience in Russia - then outlined in detail the possible financing and funding options arising out of unitisation of natural gas, which he proceeded to write up in his regular RIA Novosti column
Sam's Exchange: Dollar politics vs energy economics
The next morning I had breakfast with Mr Bokhanovsky, and he invited me to submit a proposal for an extension to the GECF's existing (but rather limited) Gas Market Model, which I have now done.
After several days' meetings in Tehran with many and varied officials and senior managers, there's a fighting chance that at next week's GECF ministerial meeting...
First gas exporters summit to focus on gas prices, greater coordination
.....this Transition Through Gas proposal - which essentially aims to monetise gas, by reference to an energy standard of exchange - might just get a following wind for development, initially through the creation of a Caspian benchmark price.
The meme which really appeared to get traction was this.....
.....rather than oil priced against the dollar, and then gas priced against oil, why not price oil and dollars against gas?