Maduro Visits Putin, Proposes Global Oil Trade In Rubles, Yuan

Tyler Durden's picture

Three weeks after the US imposed financial sanctions on Venezuela in an effort to cripple its economy and choke the Maduro regime, which in turn prompted Caracas to announce it would no longer receive or send payments in dollars, and that those who wished to trade Venezuelan crude would have to do so in Chinese Yuan, today during an energy summit held in Moscow, Venezuela's president Nicolas Maduro proposed to expand his own personal blockade of the US, by proposing that all oil producing countries discuss creating a currency basket for trading crude and refined products. One which is no longer reliant on the (petro)dollar. 

“Developing a new mechanism of controlling the oil market is necessary,” Maduro said on Wednesday at the Russian Energy Forum, being held in Moscow this week.

Quoted by RT, Maduro also blamed trade in crude oil paper futures as having an adverse impact on the oil market, which has undermined attempts by OPEC to stabilize prices. To counteract such "speculation", Maduro proposed an alternative currency basket, one which is based not on the world's reserve currency but includes the yuan, ruble, and other currencies, and which will mitigate the alleged adverse impact of futures trading.

 

 

Maduro's proposal is merely the latest not so veiled hint at dedolarizing the global financial system by bypassing the petrodollar entirely, and rearranging a new currency basket determined by the world's biggest oil producer, and largest oil importer.

Of course, Maduro is merely piggybacking on what China may already have in the works: recall that a month ago, the Nikkei Asian Review reported that China is preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into gold, potentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan.

Maduro also insisted that Venezuela is dealing with its debt to Russia, currently in the billions, and that Rosneft's deal with Venezuelan state oil producer PDVSA is “subject to negotiation.” “We fulfill all the obligations to Russia. If we get more favorable terms for restructuring the debt, this will be the result of a deal between the two governments,” said Maduro. It was unclear how Putin felt toward said proposal. 

Maduro also complained that US sanctions make it difficult to negotiate the debt issue with American debt holders (something the US is well aware of). In addition to switching to a Yuan-based basket...

... Caracas has been framing a plan to deliver its crude to alternative markets should the White House impose sanctions on trading the country's oil, Maduro said in response to a question on the possibility of PDVSA's default. “Venezuela has plans A, B, C, and others. There are other international companies interested in buying oil and refined products. We will create the best terms for them,” he said.

It remains to be seen if a last minute agreement by Russia and China to bailout Venezuela by revoking some or all of the petrodollar's reserve currency privileges, is in store. Needless to say, such a development would be the biggest shock to the global monetary system since Nixon killed the gold standard.

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dirtyfiles's picture

now ..this is big

wee-weed up's picture

 

 

Maduro + Putin = Socialism squared!

Venezualans = Fucked quadrupled!

Deathrips's picture

This is what you call fucking zio asses.

 

END THE FED

 

RIPS

NoDebt's picture

The reason to do this is because they are going to default on every dollar-denominated loan.  They will be cut off from dollars.  That Maduro would shift from dollars to ruble/yen in such a situation is about as surprising as the sun coming up tomorrow.  Now let's see if they extend him credit to continue his socialist utopia a while longer.  I doubt it.  I think it will be "cash and carry" terms.  Just that the cash will be yuan/ruble.

 

Juggernaut x2's picture

Maduro should be buying S400 missile systems from Putin as Venezuela will some day get Operation Venezuela Freedumb from the US since they are sitting on top of all of that oil.

scaleindependent's picture

For Pete's sake. Liberate it.  That oil needs to be liberated.

 

War is a racket.

SoDamnMad's picture

Maduro has no money. He has only oil. A thick (hard to process unless your refinery is set up for it) surfur oil. Russia has much better quality oil. So why would Russia take this oil unless it is so freaken discounted?

francis scott falseflag's picture

To keep it out of the hands of the US?

Joebloinvestor's picture

Putin isn't stupid enough to extend credit to Maduro.

MsCreant's picture

That would not be the point. Get everyone to defect from the dollar, via hook or crook or otherwise with bribes, blow, and prostitites. 

Dame Ednas Possum's picture

China, Russia, Venezuela, Saudi Arabia...

Someone’s being left out in the cold.

zzzz88's picture

once dollar is not a reserve currency, or even not the #1 reserve currency, usa will decay much much faster.

and it seems sooner than most of us can imagine

new game's picture

decay, nice...

time lapsed photography reveals a military buildup(somewhere-hehe).

hence some military exercises(somewhere-lol)...

tyberious's picture

A much safer world might replace it.

We, the USG, has been in war or at war since 1913, ok the American War on Spain, or the American War on America, or the American War on the First Peoples, or the America War on the British Banksters aka Kazirians.

agNau's picture

That is why the push for guns can only intensify.
Remember survival is government's top priority.

Now the cry should be....Remember Catalonia!!!

DeathingerStar's picture

Odds on Maduro making it home alive are short. 

divingengineer's picture

Nah, he’s fucking toast now.
Rusty bayonet up the ass.

WTFUD's picture

Nah, al-CIAd'uh's overrated! Ok so they have their mutts in the Middle-East but couldn't take out Castro in 6 decades or so of trying.

hondah35's picture

Take him out? The whole Bay of Pigs thing happened because they had declined to tell Kennedy that Castro was already on the payroll.

agNau's picture

I believe momentum is growing. It is in Russia/China's best interest to protect new members.

johand inmywallet's picture

One thing for sure is, the petrodollar is done, just a matter of when not if and how hard it hurts American citizens.

And what wars will be fought to preserve it!!

youshallnotkill's picture

Ten years ago you would have been right. Nowadays not so much.

xrxs's picture

I've found various estimates for the impact of petrodollar recycling on interest rates.  Like this news, it's not insignificant.  The 'multi-polar world' comes knocking in our hemisphere.

edit: and what is detrimental to the US in this case, is a benefit to our friends in the 'multi-polar world.'

youshallnotkill's picture

Significant yes, but not apocalyptic any more. Just the American century coming to an end.

Miss Informed's picture

The world is awash in dollar denominated debt. Dollars will be needed for a long time to settle debts.

cat2005's picture

That is assuming those USD debts will be repaid. I think many will not.

aurum4040's picture

Wars have been fought, leaders have been killed, governments overthrown, gold has been manipulated, oil spickets have been turned on, financial crises have been created all in the name of propping the dollar and lowering interest payments. Who has a worse debt situation, the US or China while considering population and humanitarian needs? Tough question. 

lakecity55's picture

Hmmm, USSA invasion in 10...9...8...

dirtyfiles's picture

yes... but the pattern must change 1 day

MsCreant's picture

When you are a criminal, but your critics and enemies are criminals too, whadayado? 

historian40's picture

I suppose we're left to deciding which is committing the more heinous of crimes.  It's really hands down at that point.

VideoEng_NC's picture

No credit needed if Russia literally pulls the oil out of the ground via contracts & ships it home.  Have a real concern that over the last 6 yrs or so, our previous adminstration has severely underestimated Putin in world affairs.  He was literally written off during the 2012 election & I'm sure he just smiled realizing his prey doesn't see the bear through the trees.  If he solidifies his position in the Middle East it will give hime the captial to pull the oil out of Venezuela oout of spite.

 

He didn't meddle in our election because he doesn't need US.

scaleindependent's picture

The US will cry: "Monroe Doctrine!, Monroe Doctrine"

slipreedip's picture

How did the petro dollar fail....

Slowly at first, then all at once.

hsun85's picture

one last rallly for the buck so that central banks can dump theirs

joego1's picture

3..2..1... U.S. annexes Venezuela for humanitarian reasons.

WTFUD's picture

They've been covertly trying for a decade or more. Did Chavez ever repatriate his gold from London? Must have or we'd have heard about it.

Son of Captain Nemo's picture

To KoTex Tillerson and the velvet hammer called the U.S. MIC you use to "extract it" on this announcement along with everything else you are losing in Iraq, Syria, Libya, Yemen and Afghanistan...

"Nail"!... Meet "Coffin"!

45North1's picture

This notion is becoming contagious and may soon be accepted as the plan.

GoldHermit's picture

It’s gaining MO - bye bye petrodollar!

Volkodav's picture

      interesting..

 

francis scott falseflag's picture

I wonder if tomorrow King Salman wants to here what Maduro said about the petrodollar today?

 

You have to acknowledge the brilliance of Putin's timing. 

HowdyDoody's picture

The Saudi King has just gone to Moscow. I'm sure the Russians and Saudis will have lots to talk about.

 

francis scott falseflag's picture

 

Anybody else smell a devaluation?

cherry picker's picture

When the dollar is no longer king

The USA will feel a hurt it has not felt since the great depression or maybe worse.

This can be fixed easily enough, it is just a change in attitude that is required, if it is not too late.

But humility is hard to accept when you believe you are top dog and are not willing to open your eyes to see the wolf pack circling around you.