21:01 GMT +3 hours26 July 2016
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De-Dollarization: Russia's Oil Benchmark Futures to Be Priced in Rubles

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Step-by-step Russia, China and other emerging economies are taking measures to reduce their dependence on the US dollar, F. William Engdahl notes, referring to Russia's crude oil benchmark initiative; the move could deal a dramatic blow to the "petrodollar's" dominance.

Russia has taken a significant step which will undermine the current Wall Street oil price monopoly: Russia's own crude oil benchmark futures contract will price oil in rubles and no longer in US dollars, American-German researcher, historian and strategic risk consultant F. William Engdahl remarks.

"The move is part of a longer-term strategy of decoupling Russia's economy and especially its very significant export of oil, from the US dollar, today the Achilles Heel of the Russian economy… It is part of a de-dollarization move that Russia, China and a growing number of other countries have quietly begun," the American researcher writes in his recent article for New Eastern Outlook.

He explains that the setting of an oil benchmark price is a cornerstone of the method used by omnipotent Wall Street bankers to control world oil prices. "Oil is the world's largest commodity in dollar terms," the historian stresses.

Engdahl focuses attention on the fact that the sale of oil denominated in US dollars is essential for the support of the American currency's leading role. Indeed, the US dollar's status as world's major reserve currency is one of two pillars of Washington's hegemony since the end of the Second World War (the other one is the US military supremacy), the historian emphasizes.

"Today, prices for Russian oil exports are set according to the Brent price in as traded London and New York. With the launch of Russia's benchmark trading, that is due to change, likely very dramatically. The new contract for Russian crude in rubles, not dollars, will trade on the St. Petersburg International Mercantile Exchange (SPIMEX)."

It is hard to overestimate the importance of a Russian oil benchmark creation, since Russia is the world's biggest oil producer.

However, the move is by no means the only measure emerging economies are taking in order to lessen their dependence on the US currency. China, the world's second-largest oil importer is mulling a plan to launch its own oil benchmark contract that will be denominated in the Chinese yuan, claims Engdahl.

"Step-by-step, Russia, China and other emerging economies are taking measures to lessen their dependency on the US dollar, to 'de-dollarize.' Oil is the world's largest traded commodity and it is almost entirely priced in dollars. Were that to end, the ability of the US military industrial complex to wage wars without end would be in deep trouble," the American historian stresses.

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Tags:
oil imports, price, emerging economies, dominance, Wall Street, oil production, dollar, yuan, oil, economy, ruble, Brent, Bretton Woods, New York, China, United States, Russia, Saint Petersburg, London
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  • Jg38691
    Russia and China will never usurp the US dollar unless they join the Euro, and back it with Gold. Not very likely to happen anytime soon if ever.
  • Mitach2002
    I'm so happy to see Russia dong this. I cheer the collapse of the terrorist American government.
  • It's time for the U.S. to bite the dust!!! Very good move by Russia and China!
  • armor
    Russia: well done...
  • mwk_mwk
    Very good news indeed, so nice to see some real leadership occurring nowadays as opposed to the addiction riddled western politicians
  • ron
    How sweet it is.
  • ronin reply toJg38691(Show commentHide comment)
    Jg38691, You are correct but the other receiving countries will also have to negotiate in non-dollar currencies for petro. So Israel's influence pushing sanctions other countries through countries it controls will be most limited.
  • Another hammer blow against the hegemony. If America stopped bullying the world it would be much better loved.
  • cast235
    China needs no Benchmark. What for to tell Russia how much is willing to pay? It won't work. Russia needs badly the SWIFT analogue, The CR Rating agencies. at least two. Also own internet. This will move Russia from VASSAL of west.
    Next, is own Aircraft certification never certifying anywhere with standards, way higher than E.U .
    Own car crash fed system, better than anyone. To certify cars. And fines that match European numbers and U.S. Russia should fine Volks, with 20B fine. For environmental damages. Also truck , ships doing illegal fishing, activities or passing prohibited merchandise should be confiscated and owners fine. BUG fines. Like U.S and E.U.
    Russia MUST FORGE a NATION.
  • michael
    about time.
  • hans.schultz
    Still it is needed to have a 'fixed' price system! If those new markets are heavily state regulated it helps, but reasonably prices in basic commodities should be based on a system of regulation by states and not any private interests!
  • Ivan Zadorozhny
    Dollar is the mainstay of the US world hegemoncy. Once it's gone, this will change.
  • Mother Gorilla
    If along with the dependence on the US Dollar, the dependence on oil and other fossil fuels would be reduced, we would be home free!
  • Mother Gorillain reply tohans.schultz(Show commentHide comment)
    hans.schultz, true!
  • YEAAAA!!! BRAVO RUSSIA!!! IT CANNOT COME QUICK ENOUGH!!! Take out the filthy poisons septic (US) $, petro $, and more so there FILTHY MANIPULATIVE F*CKING WARS!!!
    But beware, ALL the banks, accept 3, are under control of the Rothschild/N.W.O. Here is a list of them
    www.fourwinds10.net/siterun_data/government/banking_and_taxation_irs_and_insurance/social_security/n
  • Matthewbleu2
    As the biggest exporter of oil and gas it is to Russia's distinct advantage to price them in rubles. Pricing them in US dollars means, de facto, the Russian crude and gas reserves belong to the US as they can literally print any amount of dollars out of thin air. But they cannot print rubles or gold.
  • megargyin reply toJg38691(Show commentHide comment)
    Jg38691, That's not true or founded in logic or fact.

    The US dollar's fundamental is based on projection of power in 2 areas - purchasing & military.

    US purchases 20% of the world's resources & is 4% of the World's population. So exporters to the US want their market & therefore support the existing payment terms which the US converted into a self-perpetuating cycle with the sales of US debt to maintain an unfair advantage.

    The problem today is that the US surpassed critical mass and all the exporters to the US have realised they must let the air out of the balloon slowly so they can be free of the financial heroin.

    US plans are on the other hand to conquer Russia & China militarily & economically so they can reign supreme for ever but they got that wrong badly & its way too late as in real money exports China is already massively bigger than US & even Russia has more exports that the US if oil was back at $100bbl! US made exports are now below $2T.
  • Said
    Necesseray move to avoid the ongoing financing of all these cursed US-imperial wars OF terror - but: the empire is striking back more and more desperately...
    (see: Michael Hudson: Financing Our Own Oppression - www.informationclearinghouse.info/article43827.htm and
    on the geopolitics of WW3: m.youtube.com/watch?v=TC3tINgWfQE )
  • Dirk Ramsey
    Good move on Russias part. Anything that will lead to the de-militarization of the U$A is positive.
  • ralf.sxmin reply to (Show commentHide comment)
    Russell, US is bullying the world, not America.
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