What would happen if OPEC switched its international transactions from a dollar standard to a euro standard?

Question

Would the dollar crash? why?

Answer 1

we would see gas prices drop

Answer 2

There would be a temporary imbalance in the currency markets, as demand for the dollar would somewhat fall and the demand for the euro would somewhat rise. However, if this action was undertaken because OPEC was signaling a lack of fundamental faith in the dollar as a global currency, then it could actually cause the dollar crash, as various players all sought to exit the dollar market at once. Most likely, though, there would be a temporary imbalance in these two currency markets followed by a new equilibrium at different levels. There would also likely be greater stability in the price of oil, as the euro has been more stable than the dollar lately.

Answer 3

The dollar would not crash.
OPEC would have to base its production and pricing on a currency which is based on a slower-moving monetary policy, and the price of raw petroleum would probably become more stable, relative to the price of [insert anything else here].
Anyway, the largest consumer of petroleum (USA) can exert the greatest controls on its price.
OPEC changing its international transactions to the Euro might destabilize the Euro and the Dollar momentarily, but equilibrium would soon occur and the currencies would remain stable.

Answer 4

This would result in a worldwide depression within 12 months. The reason is that the US economy has to support a massive trade imbalance in order to pay for oil. A huge piece of this imbalance is payment for petroleum. The reason that the US economy doesn't break down is that all the exported dollars eventually have to come to rest, and they usually end up invested back in the US. So while trade is out of balance, the flow of trade dollars out is roughly balanced by the flow of investment dollars in. If the OPEC states required investment in Euros, this trade pattern would continue, except that it would take trade dollars from the US economy, and invest them in Europe. The result would be hyperinflation on both sides of the Atlantic. In a very brief period of time, both the US and European economies would simply burn out.

Answer 5

No - the dollar wouldn't crash. It doesn't matter if oil is quoted in Euros, Pesos, seashells, magic carpets, bottles of Jack Daniels, whatever you want.

There are currency markets where one can get whatever currency they need for whatever transaction.