To attract buyers and sellers, the exchange would have to be generally accepted as generating prices that reflect real world conditions. If prices are in terms of euros or dollars, it would not matter much. There are, after all, exchange rate markets. The questions are, how liquid will the oil bourse be, how free of price manipulation?
This could seriously weaken the dollar.
Is the dollar strong or weak now? Why are US authorities complaining about China's currency being too weak against the dollar? Is the Swiss franc strong? Who trades what major commodities in Swiss francs? A currency's strength or weakness is only meaningful in terms of confidence in its future buying power. And that is a reflection of a country's monetary policy, not of the specific units used to quotes prices.
If anything this will be the real reason we go to war with Iran
On the contrary, if Iran is serious about a establishing a real oil exchange, then it will be forced to show a commitment to the international market order, a good thing. That being said, my first reaction is that this bourse project is likely a con game meant to put into effect the rule, a mullah and his money are soon parted.
A currency's strength or weakness is only meaningful in terms of confidence in its future buying power. And that is a reflection of a country's monetary policy, not of the specific units used to quotes prices.
Not exactly regarding the dollar. If oil trading turns to Euros that reduces the demand for dollars. Through inflation, the dollar is worth less to foreign countries who have dollar reserves. These countries basically get stuck with a tax with inflation and want to have less dollars. With a drop in demand worldwide for the dollar, there so goes the worth of the dollar.