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Putin: Russia Needs to Get Rid of ‘Dollar Burden’ in Oil Trade
Beginning his new term in office, the Russian President has made disengaging the US currency from the Russian economy one of his goals, stating that the dollar monopoly is dangerous. The announcement comes as Moscow and Beijing attempt to step up bilateral oil sales and financial cooperation.
Addressing the Russian Parliament following his inauguration, Vladimir Putin called for the “unburdening” Russia’s economy from the dangerous monopoly of the US dollar in the pricing of oil in global commodities markets. He indicated that the underlying reasons were security-related.“We used to behave naïvely, but now we see that the WTO [the World Trade organization] rules are all too often broken, the restrictions are imposed for political reasons, which they call sanctions. Plus more and more of them are imposed to secure its favorite competitive advantages,” Putin said.
He stated that the new “restrictions,” breaking the world trade principles, make the world see that monopoly of the US dollar is dangerous for many regions. According to him, de-dollarization should be promoted on principle, in order to preserve the country’s sovereignty. Putin didn’t name an alternative currency in his speech.
Chinese Wall to Petrodollar
Putin’s recent announcement came less than two months after China launched yuan-denominated oil futures on the Shanghai International Energy Exchange, thus challenging the dominance of the Brent and West Texas Intermediate (WTI) benchmarks. Incidentally, in 2017 China emerged as the largest oil buyer, surpassing the United States. According to the US Energy Information Administration (EIA), in 2017 China imported 8.4 million barrels of crude per day, half a million more than the US.
Russia is ready to support the Chinese contracts, as Sputnik contributor Igor Naumov wrote, citing a source close to the top management of the Saint-Petersburg Stock Exchange (SPBEX).
“Currently, the US dollar is used as the contract currency in the global hydrocarbon trading system, as well as for other commodities,” the journalist explained. “This is what largely provides the dollar with its status as the world’s leading reserve currency. [However], the yuan is seeking to dislodge the American [petrodollar] from one of the fastest growing oil markets in the world.”
READ MORE https://sputniknews.com/business/201805091064277627-putin-dollar-oil-traiding/
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