Saudi oil production and depletion

[Ross]

A new and potentially significant source of demand is that of demand from Iran.
Iran imported a massive $1.2 billion worth of precious metals from Turkey in April alone.
Turkish exports of gold, precious metals, pearls and coins to Iran rose to $1.2 billion
in April from a tiny $7,500 a year earlier, according to figures released by the state
statistics institute in Ankara yesterday.
This is a massive increase in demand and suggests that there may be official involvement
in the imports from the Central Bank of Iran.

http://harveyorgan.blogspot.com.au/

[Ross]

Sonny said ...

" Join the fray". Ross, That sounds like you're thinking all of OPEC would be willing to sell oil at some big discount just for payment in gold. Why would they do that when they can go buy gold bullion from vending machines with their VISA cards at the Dubai Airport ?

I am sure the ME oil producers are already converting paper currency to
gold but it is substantially in the form of claims to gold held in Western bank vaults .
Understand that the paper claims to gold vastly exceed the available
physical gold .

The fun starts when there is a loss of trust or when they ask for gold
but not to be stored in Western bank vaults like the Iranians are .
Which is why the potential emergence of Chinese gold for oil traders
is so threatening . If anyone other than oil producers hold the gold it
would most probably be under Chinese control .

[Ross]

I think it is clear we are heading towards another very serious dip
worse than 2009 and that oil demand will fall substantially .
Meaning there will be competition among oil producers to sell oil .
Purchasers offering gold will likely find it is a buyers market .

[Ross]

Tuesday 05 June 2012, 15:54

CHINESE crude imports could get a boost from a pending market liberalisation,
shipping bank Arctic Securities reports.According to Arctic analysts,
China’s National Energy Administration may soon allow crude oil to be imported by
private companies.
To date, only state-owned...

http://www.lloydslist.com/ll/sector/...icle400036.ece

[Ross]

It may take many months for the gold volcano to blow its top
but the Chinese , Russians and Iranians have no illusions about where this is heading .
Meantime Western bankers continue with massive short sales of paper gold to
keep it looking normal ( 515 tons ) .

The source told KWN that not only was a shocking amount of paper gold sold
in just 4 hours yesterday, but it was also confirmed that the mainstream media
is not reporting the staggering amount of physical gold that has actually been
purchased by China recently. Here is what the source had to say:
"China has purchased hundreds of tons of gold in the last couple of months.
China is not disclosing what their true reserves are. Russia is delaying disclosure
and so is Iran. We saw record gold imports of over 100 tons through Hong Kong
to China in April, as reported by the mainstream media, but what has been reported
is just the tip of the iceberg."

http://kingworldnews.com/kingworldne...n_4_Hours.html

[Ross]

India + Iran in gold for oil deal ;

Monday, June 4, 2012
India and Iran: Ditching the Dollar for GOLD!

A new report from an Israeli news website DEBKAfile indicates that India recently invested in oil from Iran... and they paid with gold.

That's right. Both India and Iran are ditching the traditional dollar currency in favor of trading with the precious-metal safe haven.

Journalists speculate that the move is “an attempt to work around the sanctions imposed by the United States and Europe over Iran's alleged nuclear programme.”

This transaction wasn't an easy one, as oil is priced in U.S. dollars.

Therefore, two big banks had to mediate the ordeal between the two parties: India's state-owned UCO Bank and Turkey's state-owned Halkbank helped ensure a smooth and legal transaction between Iran and India...

Both banks don’t have any business with the US and therefore are less vulnerable to sanctions. According to the report, an Indian delegation has spent time in Tehran and finalized the details of the transactions.

The annual capacity of trade between these two countries is 12 billion dollars. With gold trading at around $1668, that is around 7.2 million ounces of gold.

http://www-hot-stocks.blogspot.com.a...-for-gold.html

[Ross]

Chinese gold for Iranian Oil

At least 4 million barrels of Iranian oil from the July program are on
their way to Chinese refiners, said a Chinese crude trader familiar with the negotiations.

China plans to buy about 15 million barrels of Iranian oil in July,
sources have told Reuters.

By my calculations that is approximately 27 tons of gold per month or 324 tons pa .
Which is roughly 12% of world annual gold production .

There is a very interesting game unfolding here . It is doubtless in
the interests of Chinese entrepreneurs to acquire cheap oil for gold
but it seems to me the longer term effect could easily be quite negative
for the Chinese Government .

Source
http://www.reuters.com/article/2012/...86A0VF20120711

[Sonny]

Originally Posted by Ross

Chinese gold for Iranian Oil

By my calculations that is approximately 27 tons of gold per month or 324 tons pa .
Which is roughly 12% of world annual gold production .

There is a very interesting game unfolding here . It is doubtless in
the interests of Chinese entrepreneurs to acquire cheap oil for gold
but it seems to me the longer term effect could easily be quite negative
for the Chinese Government .

Source
http://www.reuters.com/article/2012/...86A0VF20120711

Ross, w/re: the Chinese, what might the longer term down side risks be ?

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