The case for euro oil trading

Because the crude oil market is not perfectly competitive, the choice of currency is relevant for real oil prices in different markets. The euro has taken the brunt of the dollar depreciation, so that oil prices in recent years have been more stable in euros than in dollars. Stability makes the euro a more attractive currency for storing value, also for oil exporters. Therefore, the euro should replace the dollar as the as the unit of account, the standard of value in contracts and the medium of exchange; in brief, oil should be priced and traded in euros. The counter-argument is that international oil trading is based on the dollar, not only for crude oil, but also for refined products that ultimately are sold in local currencies; this provides a transparent and efficient oil market. The present dollar oil trading imposes a currency risk and ensuing costs on non-US agents in the market are often seen as unreasonable. Further depreciation would most likely undermine the position of the dollar in oil trading. Copyright 2008 The Author. Journal compilation 2008 Organization of the Petroleum Exporting Countries.

Changing the rules of the game: an analysis of EU influence on electricity and gas liberalization: with a focus on the Baltic Sea Region, and future challenges to EU energy market regulation

This study analyses the expansion of the EU into energy market regulation. It shows that the limits to EU influence and, thereby, EU energy market regulation for the internal energy market, begin where EU influence affects national interests with regard to ensuring energy security. This scientifically established insight bears an important practical implication. The further development of EU energy market regulation as a cornerstone of the internal energy market faces a particular policy challenge: It is necessary to establish a regulatory framework for the internal electricity and gas market, which acknowledges the primacy of national energy security interests. This finding is important in the light of the new and increasing energy policy challenges that some Member States face today, not least as a result of a liberalized energy market. Moreover, in the context of new systemic risks arising from ongoing energy market integration, a politically unstable (in the worst case - collapsing) EU regulatory framework can cause significant social and economic costs for individual Member States. With regard to that, the study points to the increasingly complex policy areas that are made subject to EU integration and calls for more attention to the related regulatory and political risks - also with a view to the current euro crisis. Diese Studie analysiert die Expansion der EU in die Energiemarktregulierung. Sie zeigt, dass die Grenzen des EU Einflusses und damit des EU Regulierungsrahmens für den Energiebinnenmarkt dort beginnen, wo nationale Interessen mit Blick auf die Gewährleistung der Energieversorgungssicherheit tangiert werden. Diese Erkenntnis hat eine wichtige praktische Implikation. Die weitere Ausgestaltung der EU Energiemarktregulierung und damit des Fundaments des Energiebinnenmarktes steht vor einer besonderen politischen Herausforderung: Es gilt einen stabilen gemeinschaftlichen Regulierungsrahmens für den europäischen Strom- und Gasmarkt unter dem Primat nationaler Energiesicherheitsinteressen bereitzustellen. Dies ist von Bedeutung im Lichte wachsender und neuer energiepolitischer Herausforderungen für die einzelnen Mitgliedstaaten, nicht zuletzt als Folge eines liberalisierten Energiemarktes. In Anbetracht neuer systemischer Risiken, die sich aus einem integrierten europäischen Energiemarkt ergeben, kann ein politisch instabiler (im schlimmsten Fall kollabierender) gemeinschaftlicher Regulierungsrahmen für die Mitgliedstaaten hohe soziale und ökonomische Kosten nach sich ziehen. An dieser Stelle verweist die Studie auf die immer komplexeren Integrationsgegenstände der EU und fordert, dass den damit einhergehenden Risiken, regulatorischer und politischer Art, grössere Aufmerksamkeit zu schenken ist - gerade auch mit Blick auf die aktuelle Krise der Gemeinschaftswährung