Last week we reported [15]that while the West was busy alienating Russia in every diplomatic way possible, without of course exposing its crushing overreliance on Russian energy exports to keep European industries alive, Russia was just as busy cementing its ties with China, in this case courtesy of Europe's most important company, Gazprom, which is preparing to announce the completion of a "holy grail" natural gas supply deal to Beijing. We also noted the following: "And as if pushing Russia into the warm embrace of the world's most populous nation was not enough, there is also the second most populated country in the world, India." Today we learn just how prescient this particular comment also was, when Reuters reported [16]that Rosneft, the world's top listed oil producer by output, may join forces with Indian state-run Oil and Natural Gas Corp to supply oil to India over the long term, the Russian state-controlled company said on Tuesday.
Rosneft CEO Igor Sechin, an ally of President Vladimir Putin, travelled to India on Sunday, part of a wider Asian trip to shore up ties with eastern allies at a time when Moscow is being shunned by the West over its annexation of Crimea.
With EU nations threatening to cut their reliance on Russian oil and gas, Russian officials have started to look East.
Rosneft said it had also agreed with ONGC they may join forces in Rosneft's yet-to-be built liquefied natural gas plant in the far east of Russia to the benefit of Indian consumers.
We just have one question: will payment for crude and LNG be made in Rubles or Rupees? Or in gold. Because it certainly won't be in dollars.
Rosneft, which is increasing oil flows to Asia to diversify away from Europe, did not provide any additional details but said it had discussed potential cooperation with Reliance Industries and Indian Oil.
It did not have to: it is quite clear what is going on. While the US is bumbling every possible foreign policy move in Ukraine (and how could it not with John Kerry at the helm), and certainly in the middle east, where it is alienating Israel and Saudi just to get closer to Iran, Russia is aggressively cementing the next, biggest (certainly in terms of population and natural resources), and most important New Normal geopolitical Eurasian axis: China - Russia - India.
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The company said Sechin and the head of Indian conglomerate Reliance Industries also met and discussed potential cooperation in developing Russia's offshore resources, viewed by Moscow as a source of future oil production growth.
[17]
India was the last country in Sechin's Asian trip, where he also visited Japan, South Korea and Vietnam.
Russia is the world's top oil producer, pumping over 10 million barrels per day but mostly from west Siberian deposits, which are running out. Moscow is betting on offshore and unconventional oil to maintain the level.
At the same time, Russia is trying to diversify its energy flows away from its core European markets, with Rosneft leading the race with plans to triple oil flows to China to over 1 million barrels per day in coming years.
Rosneft said Sechin also discussed potential shipments of Russia's East Siberia-Pacific Ocean (ESPO) oil blend to India's biggest refiner Indian Oil Corporation (IOC.NS) but did not provide details.
There is only one country missing - Germany. Because while diplomatically Germany is ideologically as close to the US as can be, its economy is far more reliant on China and Russia, something the two nations realize all too well. The second the German industrialists make it clear they are shifting their allegiance to the Eurasian Axis and away from the Group of 6 (ex Germany) most insolvent countries in the world, that will be the moment the days of the current reserve petrocurrency will be numbered.