The Internet is suddenly alive with chatter about an “Iranian Oil Bourse,” supposedly scheduled to open for business in March 2006. Right now, the two leading oil exchanges in the world are the New York Mercantile Exchange and London’s International Petroleum Exchange. In both exchanges, trades for oil are denominated in U.S. dollars. But in the proposed Iranian exchange, oil trading will be denominated in euros.
From Salon

This is yet another problem created by the incompetence of the Bush administration. With a large and growing debt, the only thing keeping the nation from an economic collapse the the strength of the dollar. If the world oil market switches to the Euro, then any purchase of US Debt (the treasury bonds used to prop-up the Bush tax cuts, war in Iraq and the GOP pork fest of the past five years) will turn into a risker direvitive investment. If this should happen, nations that sell Oil for Dollars (OPEC) and nations that Dollar trade surpluses to buy oil (China) will have less incentive to purchase US Bonds. If oil is bought and sold for Euros, surplus Dollars held by China would buy less oil every time the Dollar losses value against the Euro. If this happens, Bond will have to be heavily discounted. The % of the budget that is used to service debt will grow every time the dollar weakens against the Euro.

I’ll end this here since this economic rant is boring, even to myself.