OPEC countries are unlikely to ditch the ailing dollar for pricing oil exports in the short-term, analysts said on Monday, despite proposals from Iran and Venezuela to consider alternatives.
Iran and Venezuela's demands are seen as political and not likely to get much support.
"It's posturing," said Mike Wittner, oil analyst at Societe Generale. "I don't think it's a serious proposal and will not be taken seriously by the rest of OPEC."
The slump in the U.S. currency to record lows on global markets this month has hit export revenues of oil exporters, because oil is priced in dollars.
This prompted calls from Iran and Venezuela at the OPEC heads of state summit in Riyadh at the weekend that the oil exporting group drop the dollar and price oil against a basket of currencies instead.
"I don't think OPEC are going to be in a hurry to change the way they price oil," said Mike Turner, head of global strategy and asset allocation at Aberdeen Asset Management.
"I think it is a politically opportune move by the more ideologically opposed governments [to the U.S.] than a move to maximize net worth," he said.
Oil is traded in U.S. dollars on the international physical and futures markets and this is not expected to change.
Kuwait, for example, unshackled its dinar from the tumbling dollar in May and switched to a basket of currencies, yet it continues to price its crude oil sales in dollars.
Iran has shifted much of the payment it receives for its oil into other currencies, but still uses the dollar to price its oil.
"When it comes to actual payment they [Iran] prefer to have payment in some other currency, said Paul Horsnell, head of commodities research at Barclays Capital. "But the price per barrel of what they are selling is dollar determined."
He said the currency used to pay for oil and the currency used to price oil were two separate issues.
The dollar's fall may have eroded OPEC's purchasing power, but it has also contributed to a surge in the price of oil to a record peak of $98.62 on Nov. 7.
For this reason analysts see no economic logic for ditching the dollar.
"I see it as highly unlikely that OPEC will move pricing oil away from the dollar. They may discuss it, but oil prices have jumped from $50 to nearly $100 this year, which is way above the dollar weakness factor that has taken place," said John Sfakianakis, chief economist, SABB bank, the Saudi affiliate of HSBC.
The Organization of the Petroleum Exporting Countries has agreed to discuss the weak dollar before they meet next on Dec. 5 in Abu Dhabi.
Saudi Arabia could consider revaluing the riyal with other Gulf oil producers, but has no plans to drop its peg to the dollar in favour of a currency basket.
The United Arab Emirates has said it could decouple its currency from the dollar and track a currency basket that includes the euro, as Kuwait did earlier this year.