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Page added on May 7, 2016
Russia Nears Launch Of Ruble-Priced Oil Trading Platform
It appears Russia is close to taking the next big step towards de-dollarization and killing the petro-dollar as Vladimir Putin’s “dream” of ruble-based pricing of its domestically-produced oil is on the verge of realization. SPIMEX (The St. Petersburg International Mercantile Exchange) is actively courting international oil traders to join its emerging futures market, which as Bloomberg reports, is designed “to create a system where Russian oil is priced and traded in a fair and straightforward way.”
Step-by-step Russia, China and other emerging economies are taking measures to reduce their dependence on the US dollar, and as SputnikNews detailed, F. William Engdahl warns – referring to Russia’s crude oil benchmark initiative – this 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).”
And, as Bloomberg reports, it appears that day is getting close…
The nation’s largest commodity exchange, whose chairman is Putin ally Igor Sechin, is courting international oil traders to join its emerging futures market. The goal is to increase revenue from Urals crude by disconnecting the price-setting mechanism from the world’s most-used Brent oil benchmark. Another aim is to move away from quoting petroleum in U.S. dollars.
If Russia is going to attract international participation in Russian-based pricing, the Kremlin will need to persuade traders it’s not simply trying to push prices up, some energy analysts said. The government is dependent on oil revenue to fund its budgets.
“The goal is to create a system where Russian oil is priced and traded in a fair and straightforward way,” said Alexei Rybnikov, president of the St. Petersburg International Mercantile Exchange, or Spimex, in a phone interview.
Russia, which exports about half its crude, has long complained about the size of the discounts for lower quality Urals oil compared to North Sea Brent prices, which are assessed by the Platts agency. With world oil prices down by half in the past two years and Russia facing the prospect of its worst budget deficit as a percentage of its economic output since 2010, it needs every dollar of petroleum revenue it can get. Having its own futures market would improve Russian oil price discovery as well as help domestic companies generate extra revenue from trading, said Rybnikov.
Not everyone is excited about the prospect of a Russia-controlled oil benchmark, as one can well imagine…
“The reality is that the Kremlin is always likely to be heavily involved in the Russian oil industry,” said Richard Mallinson, an analyst at Energy Aspects Ltd. “That creates the concern that the proposals might be structured to try to achieve higher prices, which is not consistent with efficient price discovery.”
Moscow is not alone in its push to change global oil pricing. China, which vies with the U.S. as the world’s biggest crude importer, has spent two decades trying to introduce its own oil futures contact, now expected this year. Iran and Venezuela, members of the Organization of Petroleum Exporting Countries, have called for trading oil in other currencies than U.S. dollars.
The Kremlin plan echoes the New York Mercantile Exchange’s efforts to offer Russian export oil futures in late 2006. Nymex, now part of CME Group Inc., discontinued the contract six years later because it wasn’t popular among traders, JBC Energy GmbH said.
“Some market participants might be wary of embracing the new futures contracts as a benchmark due to concerns about the Russian government’s high degree of involvement in the oil sector,” said Eugene Lindell an analyst at Vienna-based JBC. “It remains questionable as to what extent Spimex can provide a better overall trading framework.”
zerohedge
23 Comments on "Russia Nears Launch Of Ruble-Priced Oil Trading Platform"
geopressure on Sat, 7th May 2016 3:17 pm
trying to get around our corrupt CME
Go Speed Racer on Sat, 7th May 2016 5:16 pm
Losing the petro-dollar monopoly, could cause inflation. In turn, erode the buying power, of fat americans spending their welfare checks at Wal-Mart on chinese goods. With the price of Top Ramen going thru the roof, they might have to go on a diet. This could lead to layoffs at the sewage treatment plant.
Truth Has A Liberal Bias on Sat, 7th May 2016 6:45 pm
The demand for US dollars will decrease as the global oil market transitions to conducting transactions in currencies other than US dollars. In the past if Germany wanted to buy oil from Russia they would first have to aquire US dollars to give to the Russians in exchange for the oil. When the demand for something decreases then it’s value decreases. In the past anybody who threatened to sell oil for any other currency besides US dollars usually found themselves on the receiving end of a hostile relationship with the USA. Now the USA can do fuck all about it. That’s called regression of power. The USA is a has-been. For now the USA is still preeminent but is definitely no longer dominant. Iran and Russia easily defied US will in Syria. The USA will have a little hissy fit (Trump) but that’s about all they can do. Most Anericans are fat and lazy. Very few of the fit and healthy are willing to fight for their country anymore. Can’t say I blame them. Who wants to die for Wall Street anyway? There’ll always be a few suckers but the numbers are dwindling.
makati1 on Sat, 7th May 2016 7:16 pm
This is not news to those who keep up with the real world outside the US MSM Iron Curtain. The rest of the world would love to get away from the USD in ALL of their financial transactions. It costs them money and every transaction is subject to US control. Oil and gold is moving out of US control and into the control of China and Russia. Countries too big to invade like Iraq or Libya.
I say go for it guys and do it soon.
Davy on Sat, 7th May 2016 7:57 pm
I love how you pussies whine about the dollar and little changes. What has changed lately is the Brics are self-destructing. WTF anti-mericants what’s the deal? You pussies look ridiculous.
JuanP on Sat, 7th May 2016 8:02 pm
Russia’s Rosneft makes first LNG export shipment. Now both Gazprom and Rosneft are exporting LNG from Russia. https://www.rt.com/business/342073-rosneft-lng-egypt-export/
JuanP on Sat, 7th May 2016 8:09 pm
Why Gazprom’s “monopoly” in Europe is far from over, http://oilprice.com/Energy/Energy-General/Why-Gazproms-Monopoly-in-Europe-is-Far-from-Over.html
JuanP on Sat, 7th May 2016 8:19 pm
Russia is smart to start creating parallel financial and economic institutions. With its own debit and credit systems, an alternative to SWIFT, the AIIB and BRICS Bank, its own software and hardware, etc.
Russia can provide all the water, food, shelter, healthcare, transportation, and energy its population needs, and can also defend itself from anyone in the world and trade with its neighbors indefinitely.
The more independent and self sufficient they become the better off all the countries in the world will be as the global financial system is bound to break.
Davy on Sat, 7th May 2016 8:24 pm
Sure Juan except when the global financial system breaks these parallel systems will be of little use. So what Russia is doing is raising the cost of doing business at a time their economy is in decline.
Russia is one of the best positioned of major powers for a collapse but they will still need luck. Anything can happen anywhere at this point. There is nowhere to hide.
Truth Has A Liberal Bias on Sat, 7th May 2016 9:41 pm
the demand for US dollars will decline as it becomes possible to do business without it. As its value declines the US debt will be increasingly costly to finance. Sorry to rain on your parade Davy but you’re delusional. It’s just the way it is. Nobody wants your Monopoly money. USA imports oil. Russia exports it. It’s not hard to see who has the upper hand here. USA has been recently snookered in Afghanistan, Iraq, Ukraine and Syria. USA hasn’t won a war since Panama. Time to wake up from your dream.
makati1 on Sat, 7th May 2016 9:52 pm
Truth, you are correct, of course. Russia holds more natural resources than any other country in the world and that is why the Us is so desperate to get control of them. When their oil has to be paid for in rubles or gold, it will be a totally different ball game. The US will slide into the 3rd world so fast their heads will spin.
Davy on Sun, 8th May 2016 6:09 am
Truth is that you are a dumbass from Montreal, you are not raining on my parade chump. The dollar is going down that is clear just as globalism is. That is inconvenient for your sorry ass that is living on his $40K investment income that is going to be trammeled into a small sum you are barely going to live on. Your cocky stupid attitude will be humbled pretty soon. You show a serious lack of financial understanding just like your buddy Makati Bill. You asswipes want the US to crash but your income depends on it but you are in denial of this. It depends on it because if the US dies like you wish so goes globalism and by extension your livelihood.
There is no dethroning the dollar until globalism crashes. China was the last great hope for that possibility but China is in worse shape financially than the US. Let me rephrase that China is in terrible shape and that situation is going to sink the US who is in terrible shape in a slightly different ways. This Chinese financial collapse process is not only going to sink the US but also the global economy including Russia that is very much connected to it.
Russia is a small impactor on the global economy. Its GDP is too low to matter like China, US, and EU. It is important for other reasons but it economic impact is not at that higher level. Of course that is not what you were concerned about what you were concerned about is who can beat America. What is worse is this extreme desire to discredit anything and everything American is often just fantasy. You and other board Canadians live and die for this fantasy and delusional thinking. OH, sure, you guys have plenty of cherry picked facts but it is the big picture narrative that you crash and burn on.
You guys to the north on this board need to be looking at your own dirty laundry. Canada is heading for a terrible economic wake up call. You just had a region burn up that is vital to your economic health. It is not a show stopper but it is just another stick on the camel’s back. That doo doo should be your worry Truth that is a dumbass from Montreal. While you’re at it talk with your buddy Anonymous over to the west in Toronto. He is actually worse than you in fantasy and delusion. Have him send a telegram to the Hongcouver boys. Sorry to rain on your parade Canadians who hate America.
shortonoil on Sun, 8th May 2016 6:59 am
“Sorry to rain on your parade Canadians who hate America.”
I lived and worked in Canada for almost 30 years. I even married a beautiful women from Montreal. Canadians do not hate Americans. The Quebec Quay are the exception. They are the ones that drive around with coon tails tied to their antennas. They are what the French left behind when they handed Canada over to the British. They hate everyone, including themselves. So let’s let not lump all Canadians into one pile. Canada is America’s partner, and will remain so for as long as North America can fend off foreign invasion.
Davy on Sun, 8th May 2016 9:48 am
Exactly Short and let’s not have double standard and lump all Americans into a common group. That is all I am asking. The criticism of The US is vital because it is responsible for a significant amount of problems. If we care about the truth then the US as a source of many of the problems must be dealt with.
I would go further concerning Canada, since the US and Canada share such a large amount of trade and culture we need to be supporting each other. Canada has much the US can learn from but we are not going to learn from them with an abnormal amount of negativity and unbalanced criticism.
I do not enjoy being part of my end of the fight but I will not lay down and be kicked in the teeth daily from extremist with agendas. All it takes is a little moderation. I realize the group on this board has a particular disposition and I have no desire to get special treatment. I don’t need board affirmative action BS. What I would like is a basic level of respect with a minimum of fairness and balance. I am ready anytime but this has been an open invitation for 2 years now.
There are those that enjoy conflict and like to see their agenda satisfied. Not hard to do here because there is much support for radical talk. As we self destruct as a global people what need to try to avoid is making the pain and suffering worse. We need to find some common understanding and work from there. It may be too late.
Boat on Sun, 8th May 2016 10:49 am
Davy,
You think about agendas. You have agendas. What is the point. This site has very little to no impact in the world.
I am here because energy has become my fav topic over the last few years. I would prefer civil discourse but it is not necessary. I take a lot more flack than I give out.
I am not an American apologist like you. I do not hate any person, group or country and find wanting the destruction of people and their syystems ridiculous and distasteful.
99.999 percent of world citizens have very little control over what has or will happen.
Apneaman on Sun, 8th May 2016 11:22 am
You’re right boat, no one has an control freak agenda like heavily medicated borderline schizophrenic neocon Davy. Anyone can look through his comments and read his constantly telling everyone what they “should” and “need” to do. Got’s a plan for the whole world that boy do. Very thin skin too. Which is very un 1%ish.
Apneaman on Sun, 8th May 2016 11:41 am
Agendas are time consuming. Why they can cause people who have responsibilities, like young kids, to ignore them and spend all day every day yelling at anonymous people on the internet. Some say neglect is just another form of abuse. I wouldn’t know cause I don’t have kids to neglect and never did. I had a wife I neglected – had being the key word here. Having very few responsibilities makes my time wasting guilt free. One would think that parents would want to spend what little dystopian free time is remaining (not long) with their kids while they can. Maybe take them for ice cream or to the water park or any of that other stuff I see them do. I guess cyber arguing all day is much more important. All important apparently.
Anonymous on Sun, 8th May 2016 12:29 pm
Sorry, short, Canada is not amerikas ‘partner’, but its energy colony. Nor for that matter is Australia, NZ or Britain even, whom the elites here and there like to use the term, ‘special relationship’ to describe things. At best, the current state of affairs between all the little ‘anglo’ states and the big, sort-of-english state, could be described more accurately, as a Master-House Slave relationship.
The uS regards Canada, and all the other anglo nations as privileged house slaves. They get to dress in nice clothes, work in the big house, and even, receive better accommodations and working conditions than all the other slaves working in the cotton fields.
But slaves and servants all the same. The uS continually interferes in elections and economic, and certainly military affairs of ALL its colonies and severely restricts whatever freedom of action to decide there own paths that they might otherwise enjoy.
Sorry, but I dont subscribe to the oft-trotted out ‘friends and allies’ of the americans trope. The americans are the greatest threat to our independence and freedom-period. Not ‘ISIS’, or Russia (lol),or China, or President Assad of Syria. But the americant empire. Now it be said, I wish this wasn’t the case. But it is, and wont change until the empire is utterly destroyed. And it will likely destroy all of its ‘friends and allies’ when it goes down as well. That too, is something I wish wasn’t the case…
Davy on Sun, 8th May 2016 12:50 pm
Boat my agenda is to cripple extremist agendas. Your agenda is being an ugly American that gives ammunition to the anti-American extremist. You represent all they hate and your personification here is just what they are looking for. In that respect I loathe you because you are part of the reason this board will never stabilize. The world hates ugly Americans that think everything is fine and America is great. It ain’t great Boat and when dumbasses like you say it is you just support the dynamics of extremism.
Davy on Sun, 8th May 2016 1:03 pm
Ape Hole, offering something is better than your fire and brimstone of hate, resentment, and self-importance. You want everyone to know they are doomed. You take it a step further you want people to suffer even before they suffer a painful death. You want people to have their damnation now in a slow motion of painful pre-death. This is especially true of the US. You want to promote lynching and hate crimes of course against those you hate. You make me sick. I loved when you said a few months ago that if you left this site readership would plummet. Ape Hole are you stuck on yourself? Do you have one of those personalities where you are always looking in the mirror at how great you think you look? Do you save all your comments and reread them to feel that thrill of grandiosity? Ape Hole, do you feel you are a rock star and have a following? Give it a rest Ape Hole.
Boat on Sun, 8th May 2016 1:11 pm
“The uS regards Canada, and all the other anglo nations as privileged house slaves”.
As an American and Texan I never hear anything bad about Canada. Texas competes with Canada for oil/ market share. There may be a few oil and gas people that wish you kept your FF to yourself but most believe in free markets.
Oh, lol, forgot Davy.
Boat on Sun, 8th May 2016 1:24 pm
Boat my agenda is to cripple extremist agendas
Another stupid azz statement. Like you have a cape and mind control. Lol
Davy on Sun, 8th May 2016 1:28 pm
Azz in your statments are not stupid?