Iranian President Mahmoud Ahmadinejad attends the OPEC meeting in Riyadh on Nov. 17.
Iranian President Mahmoud Ahmadinejad attends the OPEC meeting in Riyadh on Nov. 17. - 
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KAI RYSSDAL: Oil closed up today -- $94.64 a barrel. For OPEC countries, the issue's not the price so much as the currency. Cartel members met in Saudi Arabia over the weekend, and some of them went out of their way to bad-mouth their biggest customer -- us. Because the greenbacks we've been sending to pay for our oil aren't worth what they used to be, which is cutting into OPEC's profits. And this morning we woke up to an announcement that Iran will no longer use the lowly dollar to price its oil.

Let's be clear that the dollar's slide isn't new. It's off 25 percent against the euro in the past five years. But when OPEC speaks, people listen. Which has raised some concerns about whether the rest of the world might follow suit.

Marketplace's John Dimsdale reports from Washington.

JOHN DIMSDALE: Iran began moving away from the dollar two years ago, and already prices 80 percent of its crude in either euros or yen.

TOM WALLIN: There's a lot less to it than meets the eye.

Tom Wallin of the publishing company, Energy Intelligence, says the long-term oil contracts Iran sells for euros and yen are actually pegged to the dollar. That's because all oil sold on short-term spot markets is still priced in dollars, and those markets influence how Iran and other countries set long-term prices.

WALLIN: They could insist that they get paid in euros or in yen or some other currency, but they're always going to be in a dollar starting point. It's more symbolic, I think than, you know, having much real commercial or financial impact.

Wallin says Iran's leaders want to show local audiences they're standing up to the U.S. Still, given the greenback's falling value, Martin Baily at the Brookings Institution expects oil exporters, like Russia or Mexico, to start using other currencies.

MARTIN BAILY: And we may co-exist with both the dollar and the euro serving as benchmark currencies. But also keep in mind, that you don't want to be a position of dumping dollars because you're only making yourself worse off. If they have a lot of dollar assets, they don't really want to start unloading those and seeing the value of the dollar fall because they're shooting themselves in the foot.

If producers gradually move away from dollar pricing, the value of foreign oil would become subject to fluctuations in other currencies, and that would mean more of a roller coaster at American pumps.

In Washington, I'm John Dimsdale for Marketplace.