Will oil ever be priced in a currency other than dollars?

BY Paul Solman  April 29, 2008 at 5:34 PM EDT

Gas prices

Question/Comment: Has there been a shift from petrodollars to petroeuros in world energy trading? I read that such a shift would result in less demand for the dollar, resulting in a drop in the dollar’s value.

Paul Solman: “Petrodollars” was originally coined in the ’70s, meaning dollars earned from selling oil. In my vocabulary, that’s what it would still mean. But I think your question is whether oil will, sooner or later, be priced in a currency other than dollars. Quite possibly. But what’s already happened is that, as the dollar has plunged in value, oil costs more in terms of dollars. In euros, it hasn’t risen nearly so much in price.

I may be missing something, but I can’t quite see what the big deal is. If the price goes up in dollars and oil is then priced in euros, it should cost us just as much more. The key is how much oil the dollar can actually buy – in euros, or any other currency (See the Online NewsHour’s discussion with a Chevron executive on oil prices).