Russia, Iran Proceed With Bilateral Trade, Drop Dollar; Russian Warships Park In Syria; Iran Accelerates Nuclear Enrichment

Tyler Durden's picture

For anyone wondering how the abandonment of the dollar reserve status would look like we have a Hollow Men reference: not with a bang, but a whimper... Or in this case a whole series of bilateral agreements that quietly seeks to remove the US currency as an intermediate. Such as these: "World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", "China, Russia Drop Dollar In Bilateral Trade", "China And Iran To Bypass Dollar, Plan Oil Barter System", "India and Japan sign new $15bn currency swap agreement", and now this: "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says." And ironically, the proposal to dump the greenback did not come from Iran. Per Bloomberg: "Iran and Russia replaced the U.S. dollar with their national currencies in bilateral trade, Iran’s state-run Fars news agency reported, citing Seyed Reza Sajjadi, the Iranian ambassador in Moscow. The proposal to switch to the ruble and the rial was raised by Russian President Dmitry Medvedev at a meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in Astana, Kazakhstan, of the Shanghai Cooperation Organization, the ambassador said." Is Iran gradually becoming the poster child of an energy rich country that just says no to the dollar: "Iran has replaced the dollar in its oil trade with India, China and Japan, Fars reported." Next thing you know China, Russia and Japan will engage in bilateral trade agreements with the Eurozone in exchange for purchasing European or EFSF (which at last check are now forced to give 30% guaranatees) bonds, and bypassing dollars completely. But yes, aside from everyone else, virtually everyone (footnote 1) is still using the dollar as currency of global exchange.

And just to make sure that the message is heard loud and clear, Russia just docked several warships in Syria, the same country the US told all American citizens to leave two months ago. From China Daily:

Russian warships patrolling the eastern Mediterranean Sea have docked at Russia's naval supply facility in the Syrian port of Tartus, the private Addounia TV reported Saturday.


Governor of Tartus Imad Naddaf received the ships' leaders and expressed appreciation to Russia's support for Syria, the report said.

Russia's state-owned Itar-Tass news agency quoted a source from the Russian Navy as saying that "It is planned that the port of Tartus will be visited by a big anti-submarine ship of the Northern Fleet 'Admiral Chabanenko' and an escort ship 'Yaroslav Mudry'."


"Our ships are supposed to stay in Syria for several days," the source said, without giving more details about the warships' mission in the country.


The move is considered by many observers as an apparent show of Russia's support for Syrian President Bashar al-Assad whose country has been gripped by a nearly 10-month bloody unrest.


The Russian Navy, however, claimed the move was part of scheduled exercises and had no connection with the situation in Syria.


The warships, led by "Admiral Kuznetsov," the country's only aircraft carrier, have started their patrol missions in the Northeast Atlantic and the Mediterranean Sea on December 6 to "ensure the security of the sea navigation and other Russian maritime economic activities," according to the Russian Navy.

That this is happening just as Reuters inform us that Iran is about to move the invasion timetable by a few months is rather disturbing - recall that "according to Ehud Barak, the Israeli Defense Minister, after September, a successful military attack on Iran’s nuclear sites will no longer be possible, because Iran will widen the redundancy of its facilities and spread them out over more sites, including the impenetrable  site at Fordow (near Qom), which is located inside a mountain." From Reuters:

Iran will in the "near future" start enriching uranium deep inside a mountain, a senior official said, a move likely to further antagonize Western powers which suspect Tehran is seeking nuclear weapons capability.


A decision by the Islamic Republic to conduct sensitive atomic activities at an underground site - offering better protection against any enemy attacks - could complicate diplomatic efforts to resolve the long-running row peacefully.


Iran has said for months that it is preparing to move its highest-grade uranium refinement work to Fordow, a facility near the Shi'ite Muslim holy city of Qom in central Iran, from its main enrichment plant at Natanz. The centrifuges and other equipment needed to start enrichment were installed at Fordow last year.


Iran is already refining uranium to a fissile purity of 20 percent - far more than the 3.5 percent level usually required to power nuclear energy plants - above ground at Natanz.


The country said last year it would move this higher-grade enrichment to Fordow, which like other Iranian nuclear sites is regularly inspected by the IAEA, and also sharply boost output capacity.


The United States and Israel, Iran's arch foes, have not ruled out strikes against the Islamic state if diplomacy fails to resolve the dispute.Iran disclosed the existence of Fordow to the IAEA only in September 2009 after learning that Western intelligence agencies had detected it.

The bottom line is that once the transition to Fordow is complete there will be no more possible ways to spin an invasion. Which gives a rough "window of opportunity" - expect to see it reflected ever more in the price of Brent as the September deadline is pushed forward by weeks and months.

As for the escalation in the USD-depegging, all that needs to happen now is for the brand spanking new Chinese aircraft carrier to do some wargames of its own in the Straits of Hormuz for the pre-terminal escalation chaos to be complete.

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apberusdisvet's picture

The fundos for gold are building to a crescendo.  No wonder "they" did the take down in December.  They may try another, but it is very doubtful that, in the foreseeable future, gold will come close to $1500.

Sudden Debt's picture

Who says the russians won't sell them a nuke if the US doesn't back down?


lolmao500's picture

Because a lot of Iranians hate Russia with a passion.

Sudden Debt's picture

let's see.... Russia hates America (some history there) and Iran does to....

you sure?

and if they pay a billion per nuke for it?

CPL's picture

The rial is an oil backed currency.  So it would be a ruble to oil exchange as one of the tylers mentioned.


No dollars.  Just oil


Oil > USD

pkea's picture

russia can help iran out of principle

BigJim's picture

O really? Why's that, then?

earleflorida's picture

ummm, don't forget about the 100k iraqi troops poisoned in 'desert storm' [left to dry-rot in the deserts grave-yard] by the brit's and u.s.,... wasn't that far back - but russia and iran is a different story, with alot of meat on it to be spun some 40 years ago, where the average populations age is 40 years old [long time forgotten?]

let's face it,... the world is getting fed-up with our ludicrous, malicious, hostile, and flagrant foreign policy bullying

what the hell has iran done? someone answer me that,... it was the arabs that caused 911, not the iraqi's, iranian's or for that matter the taliban in afghanistan 

gravedestruction's picture

"not the iraqi's"

got one out of three right

331/3% not a bad ratio all things considered

fxrxexexdxoxmx's picture

Do they still beat women for speaking in Iran? Or are they still shooting them?

pan-the-ist's picture

They don't consider it rape in the USA unless there is evidence she faught back.  I think you are talking about our Alie Saudi Arabia where women aren't worth more than yeast.

tj3's picture

It's Pakistain or Congo for me.

kiwidor's picture

I had a friend married a kiwi girl.

i warned him against it before, and on the day.  in the end he went through with it. 

3 weeks later he phones up. "she doesn't clean, she doesn't cook...i'm working, studying and keeping house and she's doing nothing"

i said "you have to slap her...if she talks back, slap her again.  when you go to bed, shag her rough and roll over and go to sleep when you have your rights the morning, wake up, stick it in rough again, and when you've finished, push her out of bed and tell her to make your breakfast"

they're still together.

Ima anal sphincter's picture

what the hell has iran done? someone answer me that ...Nothing!!

Who did 911 again???????? Must of been those "arabs" that hail from Israel who hang with the Mossad.

acrabbe's picture

the arabs didnt cause 9/11. catch up earle

xela2200's picture

And Japan used to hate China, France and Germany, etc

War makes for strange bed fellows.

CPL's picture

The need for oil surpasses nationalites, this is a question for the survival of the spieces.


Recession be damned.

Colonial Intent's picture

All nukes have a "fingerprint" dating the time and the reactor it was made from.

Whoever originally made the first terrorist nuke that is used will have some explaining to do.

xela2200's picture

Yeap, that would probably be us.

Mr Lennon Hendrix's picture

The apreciacion in the DXY could be due to a decrease in volacity, since so many States are no longer trading with it, which means the initial snapback from another QE X will be tremendous.

bugs_'s picture

Russian warships were not off Libya, are not off Iran.

They are off Syria.

What is so special about Syria to the Soviets?

Hulk's picture

Perhaps Crystal Skull Vodka???

Whoa Dammit's picture

Maybe because Syria is geographically closer to Israel?

redpill's picture

They have a naval base there left over from the Cold War.

ivana's picture

Syria is similar to Libya. Both are foreplay for Iran. Powerz have taken Libya cause they would like to have ALL Libyian oil for themselves to sell at 200+USD to Europe when Iran rumble starts.

Syria is THE VITAL LINK (oil & gas pipelines) from Iraq to Mediterranian where Powerz would like to sell their Iraqe oil after Hormuz blocade. Maybe even Saudi oil can be piped out to Mediterranian via Syria.

In case Powerz take both Libyia and Syria , Russian oil will probably not be needed so much in EU.

Very simple: conquer all available oil & gas fields and pipelines and than block Gulf. Trillions guaranteed + bonus blocked oil supply for chinese where with little luck ...there may be civil war cause 100s millions (which just have bought new car) of middle class will not be happy buying petrol at 3-4 times higher prices than year before.

BigJim's picture

Don't forget Libya's gold, now onstream to allow massive quantities of even more naked paper shorting, all at zillion:1 leverage!

DosZap's picture


 IMHO, Syria is in the cross hairs for one MAJOR reason.


They are the PIPELINE to Hamas, and Hezbollah, supplying rockets, missiles, and armaments to them FROM IRAN,keeping the shit stirred up in Israel.

They DO not WANT a peace agreement between them, and they do not want a Palestinian state.

Simply, their is no answer as far as these folks are concerned but the total annihilation of Israel.

It WILL never happen............we are prophetically getting damned close to the BIG one.

john39's picture

but zionism should be ended.  then jews, arabs and christians might have a chance to live in peace.'s picture

Zionism is not the problem. The use of force to propel Zionism is the problem. Interacting voluntarily with others while avoiding any inclination to use force is an acceptable practice even in pursuit of Zionism.

earleflorida's picture

let's not forget the gaza prison/death camps

bottlerockets don't equate to an f-18,... kinda like going into a gun fight with a water pistol

CPL's picture

What middle class?

Sudden Debt's picture

sure... they're just there to play laser tag....


Scalaris's picture


Before the Kharkiv Accords, where a signing of the treaty between Russia and Ukraine took place, where Russian lease on naval facilities in Sevastopol, Crimea was extended beyond 2017 by 25 years (to 2042) with an additional 5 year renewal option (to 2047) in exchange for a multiyear discounted contract to provide Ukraine with Russian natural gas.

This was the result of the several-year gas disputes between Russia and Ukraine, which led the latter to pay an increased price for the supply of Russian natural gas in 2006 and 2009, including a halt of natural gas supplies to European countries.  

Russia maintained a Soviet-era naval supply and maintenance base in the Syrian port city of Tartus, which was established during the Cold War to support the Soviet Navy's fleet in the Mediterranean Sea, under a 1971 agreement with Syria, and as a result, Russia became Syria's main arms supplier, after forgiving Syria of three-fourths, or $9.8 billion, of its $13.4 billion Soviet-era debt.

Amid Russia's deteriorating relations with the West, because of the 2008 South Ossetia War‎ and plans to deploy a NATO missile defense shield in Poland, Turkey and Romania, Assad agreed to the port’s conversion into a permanent Middle East base for Russia’s nuclear-armed warships.

The current pressure on Assad's regime adds further pressure on Russian operations in Syria due to NATO's intervention and puts any plans of transferring the Russian Black Sea fleet and re-establishing their pre-Soviet era Mediterranean navy presence under threat.

The power vacuum created by the waning power of the Assad regime has also proven advantageous for the Muslim Brotherhood function in the area, which is currently asserting itself towards the port of Tartus, which can be prove a vital strategic point for collaboration with Egypt and Lebanon operations.

Hence the growing support and promotion of Turkish regional geopolitical interests, through US foreign policy, in order to control the "spontaneous" Arab Spring movements throughout the Muslim areas, with its influence caused by its status as a strategic bridge between Eurasia and Middle East.

Consequently, Russia is trying to achieve further geopolitical influence in the broader Mediterranean area, through asset acquisitions of natural resources, eg. gas fields, and substantial capital investment, along with its strategic energy agreements for natural gas supply via Nord StreamSouth Stream and Blue Stream.

Vlad Tepid's picture

A military position in Syria also acts as a counterbalance to Turkish moves and adds pressure on them should they decide to tighten down in the Bosphorpus.  The Ottoman Turks were the bitter enemies of the Russians and Syria was their prime external holding for centuries and while it is in Russia's sphere it prevents it from falling back to the Turks.  Also and more tangentially, the Syriac Orthodox Church is an important patriarchy in Orthodox Christianity.  Ties between the two countries are quite deep.

Scalaris's picture


I agree regarding the counterbalancing of the military power equilibrium but I think that economic interests from Turkey's role as an intermediary pipeline host to Russia's European gas supply, overshadows any prospective conflict, derived by historic religious differences.

Moreover, Turkey's regional role is that of a complete proxy for American foreign geostrategic policies, and in the remote but not completely inconceivable possibility of a reversion to a more autocratically Islamic regime, in comparison with the current more liberal balance of secularized Islamism, will advertently force meet opposition from the State Department and subsequently, NATO. 

The fact remains though, that Turkey's vast population can provide both a great diversity as it can be divided between a burgeoning middle class, which can provide the necessary demand and thereby provide industrial output from the economically weakened European manufacturers, while its other non-urbane and more impoverished half of population can provide a large cheap labor pool, which can be promptly exploited by American and European investments.

This is the main reason of Turkey's European Union membership debate, as it is viewed as both a considerable economic force, and a threat due to the massive inflows of rural Muslim population. 

Ghordius's picture

"Turkey's role as an intermediary pipeline host to Russia's European gas supply"

You mean the Nabucco Pipeline?

But is this not seen in Moscow as a direct attempt to circumvent their hold over the Ukraine and as an attack to the gas market they are building up in Europe?

Re: the EU membership debate, George W. Bush literally poisoned the thing by trying to push too hard for immediate membership... I still wonder if this was his intent or if it just backfired


Scalaris's picture

I was mainly talking about Blue Stream, which currently carries natural gas from Russia into Turkey, and if I'm not mistaken the construction of Blue Stream's extension is underway, which will provide natural gas to Eastern Europe through Bulgaria, Serbia, Croatia and Hungary.

As for the Nabucco pipeline, it was Russia's South Stream which is considered to be a main competitor, designed to transport Russian natural gas to Austria through the Black Sea and via Bulgaria, Greece and Italy.

Nabucco's capacity of 31 billion m3 per year is proved to be commercially non-viable due to supply issues from Iraq's and Azerbaijan's gas fields, versus South Stream's of 63 billion m3 per year.

Despite worries regarding South Stream's feasibility that it may cost twice as much as Nabucco, which was initially expected to cost €12–15 billion but instead doubled, and the proposition of merging South Stream and Nabucco in order to reduce investments and operational costs, by ENI, Russica declined, highlighting South Streams's superior commercial viability and more competitive technical aspect, compared to Nabucco.

That being said, South Stream is largely viewed as a political project, in order to counter Nabucco's role as a facility designed to reduce European dependence on Russian energy, and to further expand Russian presence in the region.

CompassionateFascist's picture

US fuckup in Iraq completed a "Shi'ite Crescent" running from Teheran to Baghdad to Damascus to Hezbollah in south Lebanon. As part of the run-up to the Iran War, Isramerica is trying to cut the military supply line running from Iran to Hezbollah by taking down Assad's regime; if Assad falls, his Alawite-Shia regime will be replaced by a Sunni (Moslem Brotherhood) gang...still hostile to Israel, but now hostile to Iran as well. Wheels w/in wheels.  Russian warships tho, are preventing Isramerica, alias "Nato", from doing a Libya on Syria. In Medvedev's words, "America keeps pushing us...we are going to push back." We are rapidly approaching a Summer 1914 scenario. Hope somebody blinks. Meanwhile, invest in lead.

Tompooz's picture


Russia being what it is now, somebody has to make money out of its foreign policy.

Invest in what Russian oligarchs are investing in.

CompassionateFascist's picture

I invest in what helps me even the odds when AT&F comes calling: lead. I don't expect to survive; I do hope to get at least one of them.  

Colonial Intent's picture


A force multiplier like yourself taking ONLY one of them with you?

CompassionateFascist's picture

Just being realistic. If each Patriot renders harmless (at least) one ATF guy when they come to gun-grab, the regime is going to run out of enforcers way before we run out of Patriots. Or, we can all go over to Ann Banhardt's place and do the Concord Bridge thing. Maybe that is a better idea.

Element's picture

A very valuable near-future bulk arms buyer who will provide accomodation to trainers, and advisors, and nice docks for port visits. Russia is going back into the client-state business, because it buys strategic leverage, profile, support and scale. Russia tried staying home but it doesn't work, US/NATO took full advantage.

The end of the cold war was a major change.

This is another.

Power loves a vacuum ... and US/NATO have begun to fall off their perch.