The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan

[Butifldrm]

The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan

 

Submitted by Tyler Durden on 08/27/2014 15:57 -0400

•  

  • Several months ago, when Russia announced the much anticipated "Holy Grail" energy deal with China, some were disappointed that despite this symbolic agreement meant to break the petrodollar's stranglehold on the rest of the world, neither Russia nor China announced payment terms to be in anything but dollars. In doing so they admitted that while both nations are eager to move away from a US Dollar reserve currency, neither is yet able to provide an alternative.

    This changed in late June when first Gazprom's CFO announced the gas giant was ready to settle China contracts in Yuan or Rubles, and at the same time the People's Bank of China announced that its Assistant Governor Jin Qi and Russian central bank Deputy Chairman Dmitry Skobelkin held a meeting in which they discussed cooperating on project and trade financing using local currencies. The meeting discussed cooperation in bank card, insurance and financial supervision sectors.

    And yet, while both sides declared their operational readiness and eagerness to bypass the dollar entirely, such plans remained purely in the arena of monetary foreplay and the long awaited first shot across the Petrodollar bow was absent.

    Until now.

    According to Russia's RIA Novosti, citing business daily Kommersant, Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers. Meaning Russia will export energy to either Europe or China, and receive payment in either Rubles or Yuan, in effect making the two currencies equivalent as far as the Eurasian axis is conerned, but most importantly, transact completely away from the US dollar thus, finally putin'(sic) in action the move for a Petrodollar-free world.

    More on this long awaited first nail in the petrodollar coffin from RIA:

    "Protective measure" meaning that it was the US which managed to Plaxico itself by pushing Russia to transact away from the US Dollar, in the process showing the world it can be done, and slamming the first nail in the petrodollar's coffin.

     

     

    The Russian government and several of the country’s largest exporters have widely discussed the possibility of accepting payments in rubles for oil exports. Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September.

     

    According to Kommersant, the payment for these shipments will be received in rubles.

     

    Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.

     

    According to the newspaper, the change in currency was made because of the Western sanctions against Russia.

     

    As a protective measure, Russia decided to avoid making its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.

    This is not surprising to anyone who has been following our forecast of the next steps in the transition from the Petrodollar to the Gas-O-Yuan. Recall from April:

    Still confused? Then read "90% Of Gazprom Clients Have "De-Dollarized", Will Transact In Euro & Renminbi" for just how Gazprom set the stage for the day it finally would push the button to skip the dollar entirely. Which it just did.

     

     

    The New New Normal flow of funds:

    1. Gazprom delivering gas to China.
    2. China Gazprom paying in Yuan (convertible into Rubles)
    3. Gazprom funding itself increasingly in Yuan.
    4. Russia buying Chinese goods and services in Yuan (convertible into Rubles)

    And all of this with the US banker cartel completely disintermediated courtesy of the glaring absence of the USD in any of the above listed steps, or as some may call it:from the Petrodollar to the Gas-o-yuan (something 40 central banks have already figured out... just not the Fed).

    In conclusion we will merely say what we have said previously, and it touches on what will be the most remarkable aspect of Obama's legacy, because while the hypocrite "progressive" president who even his own people have accused of being a "brown-faced Clinton" after selling out to Wall Street and totally  wrecking US foreign policy abroad, is already the worst president in a century of US history according to public polls, the fitting epitaph will come when the president's policies put an end to dollar hegemony and end the reserve currency status of the dollar once and for all, thereby starting the rapid, and uncontrolled, collapse of the US empire. To wit:

    As of this moment, both Russia and China have shown not on that it can be done, but it is done. Expect everyone to jump onboard the new superpower axis bandwagon soon enough.

     

     

    In retrospect it will be very fitting that the crowning legacy of Obama's disastrous reign, both domestically and certainly internationally, will be to force the world's key ascendent superpowers (we certainly don't envision broke, insolvent Europe among them) to drop the Petrodollar and end the reserve status of the US currency.

    As of this moment, both Russia and China have shown not on that it can be done, but it is done. Expect everyone to jump on board the new superpower axis bandwagon soon enough.

    

    

http://www.zerohedge.com/news/2014-08-27/gazprom-begins-accepting-payment-oil-ruble-yuan

[Butifldrm]

Business Russia’s Gazprom Neft to Sell Oil for Rubles, Yuan

© Photo Gazprom neft

12:16 27/08/2014

MOSCOW, August 27 (RIA Novosti) - The Russian oil company Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers, the Russian business daily Kommersant reported Wednesday.

The Russian government and several of the country’s largest exporters have widely discussed the possibility of accepting payments in rubles for oil exports.

Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September. According to Kommersant, the payment for these shipments will be received in rubles.

Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.

According to the newspaper, the change in currency was made because of the Western sanctions against Russia.

In March, in response to Crimea’s reunification with Russia, the United States and the European Union introduced a number of targeted sanctions against Russia.

As the Ukrainian crisis escalated, the United States introduced several new rounds of sanctions targeting Russia’s defense, energy and banking sectors, and persuaded its allies to blacklist several Russian citizens and companies.

As a protective measure, Russia decided to avoid making its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.

Gazprom Neft gained control over the Novoportovskoye field in 2012. The field’s recoverable reserves exceed 230 million tons of oil and 270 billion cubic meters of gas. It is located in the Arctic and is part of the Yamal-Nenets Autonomous District.

http://en.ria.ru/business/20140827/192383783/Russias-Gazprom-Neft-to-Sell-Oil-For-Rubles-Yuan.html

 

Edited August 28, 2014 by Butifldrm

[waterman13]

Yep, it's started. Petrodollar is going down. Come on RV!

Wm13

[gymrat76541]

Gazprom Neft (Russian: Газпром нефть, formerly: Sibneft), is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.^[

 

Daaaaaaaaaaaaaaaa a Russian Oil Company that accepts rubles & yuan. LOL

Why do you think this is news?

The end of the Petrodollar with all the sanctions on Russia at this time! I think NOT!

[yota691]

It's called Currency War......Spread the Wealth...gerat......Thanks Butifldrm .....

[blueskyline]

The sooner the spreading ..................the better...

[Maggie123]

Thank You For Keeping Us Up On This Beautiful Dream.

 

Whew... Here We Go Folks... Get As Ready As You Can For Some Hard And Wild Times...

 

"...meaning that it was the US which managed to Plaxico itself by pushing Russia to transact away from the US Dollar, in the process showing the world it can be done, and slamming the first nail in the petrodollar's coffin."

 

 

Sadly Some Folks Are Going To Have The "Deer In The Headlights Look"  When We Are All In A Hurt-Lock...

 

MIT... Let's Get That Lifeboat Built.

 

[gymrat76541]

Daddy always said wish in one hand, and crap in the other hand - see which fills up faster!

 

The dollar is still KING!

[Butifldrm]

Gazprom Neft (Russian: Газпром нефть, formerly: Sibneft), is the fourth largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about 96% of its shares. The company is registered and headquartered in St. Petersburg after central offices were relocated from Moscow in 2011.^[

 

Daaaaaaaaaaaaaaaa a Russian Oil Company that accepts rubles & yuan. LOL

Why do you think this is news?

The end of the Petrodollar with all the sanctions on Russia at this time! I think NOT!

gymrat, it must be wonderful to live in your Keynesian World.  In case you did not notice the BRICS comprise 42 percent of the Worlds population.  35% of the European oil supply comes from Russia. I would suggest you read up on this issue.  

 

Let's go back in History and see how important this issue is:

 

US Threatens Russia Over Petrodollar-Busting Deal

 

Submitted by Tyler Durden on 04/05/2014 14:27 -0400

 

 

inShare109

 

On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar

• *U.S. HAS WARNED RUSSIA, IRAN AGAINST POSSIBLE OIL BARTER DEAL
• *U.S. SAYS ANY SUCH DEAL WOULD TRIGGER SANCTIONS
• *U.S. HAS CONVEYED CONCERNS TO IRANIAN GOVT THROUGH ALL CHANNELS

We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.

As we explained earlier in the week,

 

 

Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar

, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.

 

...

 

"

If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime

,"

And here is Voice of Russia, "Russia prepares to attack the Petrodollar":

 

 

The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.

 

The existence of “petrodollars” is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting

. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.

 

Lately, 

China has led the BRICS efforts to dislodge the dollar

 from its position as the main global currency, but the “sanctions war” between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .

 

The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosnef

t, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.

 

First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must should ditch the dollar. 

“ They must be braver in signing contracts in rubles and the currencies of partner-countries, ”

 he said.

 

Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. 

“ I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ”, 

Kostin told the attendees of the annual Russian Bank Association meeting.

 

Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. “ Some ‘hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines,” she said.

 

It seems that Moscow has decided who will be in charge of the “boomerang”. 

Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that "

 it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies 

". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. 

A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.

 

Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a “jumbo deal” with Indian companies.

 In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. 

If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the “petroruble” and will hurt the petrodollar.

 

It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency. 

The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia?

 During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.

Finally, those curious what may happen next, only not to Iran but to Russia, are encouraged to read "From Petrodollar To Petrogold: The US Is Now Trying To Cut Off Iran's Access To Gold."

http://www.zerohedge.com/news/2014-04-04/us-threatens-russia-sanctions-over-petrodollar-busting-deal

Edited August 28, 2014 by Butifldrm

[gymrat76541]

gymrat, it must be wonderful to live in your Keynesian World.  In case you did not notice the BRICS comprise 42 percent of the Worlds population.  35% of the European oil supply comes from Russia. I would suggest you read up on this issue.  

 

Because a Russian Oil Company starts accepting Russian money for it's product does NOT mean that they ONLY accept rubles & yuan. Did you read that?  This might be solely because of the sanctions Europe & the USA have put in place on the country?

Yeah I ain't the brightest light burning in the night but at least I do NOT pretend to know it all! WOW

[fishing]

I'm putting my money on the old great US of A, it's just  that simple.

[Butifldrm]

Because a Russian Oil Company starts accepting Russian money for it's product does NOT mean that they ONLY accept rubles & yuan. Did you read that?  This might be solely because of the sanctions Europe & the USA have put in place on the country?

Yeah I ain't the brightest light burning in the night but at least I do NOT pretend to know it all! WOW

Touche' gymrat I did not say they would not except the dollar as of yet, but I would call this the snow flake that may cause the avalanche:

 

Delhi gears to join China-Russia club - America sniffs Nato ‘counterweight’ CHARU SUDAN KASTURI

New Delhi, Aug. 5: India is preparing to join the influential Shanghai Cooperation Organisation (SCO) strategic grouping, currently led by China and Russia, just days ahead of the Prime Minister’s September visit to the US where his bonhomie with Moscow has already triggered unease.

The SCO has informed New Delhi that it plans to approve documents making India a full member at a September 11-12 summit in Dushanbe, Tajikistan, senior officials have told The Telegraph.

Iran, Pakistan and Mongolia will join India as new members of the grouping, now made up of Russia, China, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan.

America views the SCO as a potential post-Cold War counter-balance to Nato, and Beijing and Moscow have accused Washington of trying to split the grouping. Unlike Nato, the SCO has so far not engaged in military action beyond joint exercises.

India and the three other nations on the cusp of joining are currently observer states at the SCO, and China had till now been ambivalent about offering full membership to India despite Russian backing for New Delhi.

However, keen not to alienate the new Indian Prime Minister, China joined the other members to back the expansion move at a meeting of the grouping’s foreign ministers on July 31.

Indian foreign minister Sushma Swaraj is expected to travel to Dushanbe for the September meeting where India’s membership will likely receive a formal stamp of approval.

If the new members’ formal induction is completed at Dushanbe, Modi may travel in December to Astana, Kazakhstan, where the heads of government of all the SCO’s member states will meet, officials said.

“China supports the SCO summit in Dushanbe to complete the legal preparation of the expansion of the SCO members, thus to open up new ways to absorb new members,” a senior Chinese diplomat quoted his country’s foreign minister, Wang Yi, as telling the July 31 meeting.

India has been keen to join the SCO since it first became an observer in 2005. However, tensions within the grouping’s members on the countries to be allowed entry under any expansion had so far prevented the absorption of any new full member.

Over the past two years, as Russia and the US have returned to near-Cold War brinkmanship, both have turned to India as a critical nation whose support could tilt the balance of opinion among the developing countries, which make up most of the world.

The stalemate at the SCO — with China cautious about India’s entry, Russia uncertain about Pakistan’s, and all the members concerned about the implications of fully embracing Iran — suited the US well.

But global fissures have only deepened over the past two years, frequently placing China, Russia and India together against the US — as in Syria and Ukraine, where New Delhi backed Moscow over Washington.

China is also convinced that it has a potential friend in Narendra Modi despite his election speeches critical of Beijing. China had welcomed Modi with open arms three times when he was Gujarat chief minister — at a time Washington treated him as a pariah and refused him a visa.

Chinese President Xi Jinping signalled his intent to pull India closer when he indicated to Modi that Beijing was willing to consider expanding the SCO. This was when the two met on the margins of the BRICS summit in Brazil last month. Xi is expected to visit India in September.

India’s entry into a strategic grouping that will include three nations that America wants to distance from its allies — Russia, China and Iran — will almost certainly upset fence-sitters in the US establishment, already unsure of the fruits of courting India over the past decade.

“New Delhi has given Russia’s aggression in Crimea implicit approval and strongly opposed sanctions on Moscow, calling Moscow’s interests in Crimea legitimate,” Steve Chabot, the Republican chairman of a key foreign affairs panel of the US House of Representatives, told senior members of the Obama administration last month.

The administration officials were deposing before the panel ahead of secretary of state John Kerry’s visit to India for the India-US strategic dialogue last week.

“Can the US trust India to be a reliable partner on significant geopolitical challenges if, for example, we can’t get India’s support on this growing crisis?” Chabot asked.

“And has the Malaysian airliner shoot-down changed India’s attitude at all in this particular area?”

Kerry and the US received the answer to where India would stand on sanctions against Russia during the strategic dialogue when Sushma bluntly said that India’s foreign policy was “not flexible”.

Kerry accepted that he was disappointed but appeared resigned to India’s decision.

“We would obviously welcome India joining in with us with respect to that (the sanctions),” Kerry said. “But it is up to them. It is India’s choice.”

http://www.telegraphindia.com/1140806/jsp/nation/story_18691973.jsp#.U_6WTVCsjvY

[Djorgie]

Whatever the scheme... Whatever their plan... We know that the dollar IS going to crash at some point simply because it IS a fiat based currency... and when currencies crash there is usually a very large war attached to it to cover up the real reason it collapsed. They just blame it on the WAR.

[gymrat76541]

Let me just say:

Because of the value of their currency 36.19 Ruble to the dollar & 6.14 Yuan to the dollar coupled with the fact that the USA is still the world's largest consumer of oil in the world - I do NOT see it happening.

Any country can pay for oil in their currency! That does NOT mean that the world is going to switch from the petrodollar because Russia & China want not want to use it! Oh, and this is only one oil company out of thousands & Russia is being hit hard due to sanctions right this moment!

That is m logic!

[yota691]

& Russia is being hit hard due to sanctions right this moment!   

 

one more time..it's called Currency Wars....

[thegente]

The faster the fake Federal Reserve Notes masquerading as the USD implodes, the faster the Fed and it's parisitic hold on our financial system will go away. Asset backed currencies will stop of control govt spending, and endless MIC (Military Industrial Complex) benefitting corporate wars as well. Once the Fed is gone and govt downsized, US economy will take off....unless the morons in DC and elswhere start lobbing nukes.

[Maggie123]

The faster the fake Federal Reserve Notes masquerading as the USD implodes, the faster the Fed and it's parisitic hold on our financial system will go away. Asset backed currencies will stop (out) of control govt spending, and endless MIC (Military Industrial Complex) benefiting corporate wars as well.

Once the Fed is gone and govt downsized, US economy will take off....unless the morons in DC and elsewhere start lobbing nukes.

 

Agreed Gente... I say "bring It"... I hope we can get through the transition as fast as possible too.

 

And yeah... lets hope no one starts that... or I guess nothing will much matter... huh.

[sandfly]

THANKS