Iran has stopped trading oil in dollars, according to a top Oil Ministry official.

“The dollar has totally been removed from Iran’s oil transactions,” said Hojjatollah Ghanimifard. “We have agreed with all of our crude oil customers to do our transactions in non-dollar currencies. … In Europe, Iran’s oil is sold in euros, but both euros and yen are paid for Iranian crude in Asia.”

For half a century, the American dollar has been the reserve currency of the world. Seventy percent of all currency reserves are in American dollars.

This has a lot to do with the fact that oil, the most important commodity traded in the world, is mostly priced in U.S. dollars. The majority of countries, being oil importers, have to buy their oil in U.S. dollars. This, together with related economic considerations, encourages them to keep most of their foreign currency in dollars.

The debt-burdened U.S. economy is dependent upon this high demand for its currency in order to remain afloat. The day this demand comes to end will portend disaster for the American economy.

Although Iran has not yet been able to convince other opec countries to switch from the dollar, this is definitely a step in the wrong direction for the United States. If other nations stop trading in dollars, this will force the value of the dollar down.

The dollar is already weakening. Further deterioration in its value could be disastrous for America. For a detailed analysis on the subject, read “Is the Dollar Too Weak?”