Gulf States Deny Secret Plan to Dump Dollar

The world's oil producers will continue using the U.S. dollar as the currency for buying and selling crude, high-ranking oil and finance officials in the Gulf said on Tuesday, denying a report in a British newspaper.

Earlier, The Independent reported that Gulf Arab states, as well as China, Russia, Japan and France, are in secret talks to end the use of the U.S. dollar to trade oil, causing the American currency to fall in overseas trading Tuesday.

Qatar's oil minister, Kuwait's finance minister and sources in the United Arab Emirates and Saudi central banks all denied the report.

The Independent report is “absolutely incorrect” and there has been “absolutely nothing” of that nature discussed between Saudi Arabia, the world’s biggest oil exporter, and other countries, Saudi Central Bank Governor Muhammad al-Jasser told reporters in Istanbul.

"We did not discuss this at all," Russia's deputy finance minister Dmitry Pankin said on the sidelines of International Monetary Fund meeting.

The newspaper report said, "Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars."

The report cited unidentified sources in the Gulf and Hong Kong, adding that France had also been involved in the talks.

Written by leading journalist Robert Fisk, the report said Gulf states plan to transition the trading of crude oil over nine years from the U.S. dollar to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Cooperation Council, including Saudi Arabia, the United Arab Emirates, Kuwait and Qatar.

The report did not make clear how the change would work and raised doubts among some analysts that such a switch could occur anytime soon, despite speculation about the dominant role of the U.S. dollar in global trade and as the world's main reserve currency.

U.S. officials, which are "sure to fight this international cabal," are aware the secret meetings have taken place but have not fully discovered all of the details, the newspaper said.

The report cited an unnamed Chinese banker as saying the plan "will change the face of international financial transactions. America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

The issue of shifting oil trade away from the U.S. dollar has been raised occasionally in recent years. Iran began trading most of its crude oil exports in non-dollar currencies a few years ago.

In wake of the report, the U.S. dollar fell against six major currencies on Tuesday.

Reuters contributed to this report.