Russia Considers Dropping Dollar & Euro For Oil Trade With Iran And Turkey

Russian Energy Minister Aleksandr Novak says the Kremlin is mulling taking payments for oil in national currencies, particularly with Turkey and Iran - circumventing the U.S. dollar. Novak added that both countries have expressed interest in the idea.

“There is a common understanding that we need to move towards the use of national currencies in our settlements. There is a need for this, as well as the wish of the parties,” said the energy minister.

Novak notes that rearranging their financial relationships to accept the national currencies would require an upgrade to the financial and economic mechanisms which facilitate the oil trade.

“This concerns both Turkey and Iran – we are considering an option of payment in national currencies with them. This requires certain adjustments in the financial, economic and banking sectors.”

For those paying attention, circumventing the U.S. dollar is exactly what both Saddam Hussein and Mummar Gaddafi threatened to do before being regime changed under the guise of humanitarianism. Then again, they didn't have nukes. 

Iran - which has threatened to restart it's nuclear enrichment program within days, signed an agreement with Turkey to use local currencies in trade instead of the U.S. dollar and the Euro. The arrangement is aimed at improving economic ties and bilateral trade, while also undermining the West's primary currencies. 

“Considering that the use of the dollar is banned for Iran and traders are literally using alternative currencies in their transactions, there is no longer any reason to proceed with invoices that use the dollar as the base rate,” said the Foreign Exchange Rules and Policies Affairs director fro the Central Bank of Iran (CBI), Medhi Kasraeipour.

During a November meeting with Russian President Vladimir Putin, Iranian Supreme Leader Ali Khamenei said that the best way to sidestep US sanctions against the two countries would be a joint effort to circumvent the U.S. dollar and conduct bilateral trade - which would "isolate the Americans." 

Last year, Venezuela stopped accepting U.S. dollars for oil payments in response to sanctions - requiring that imported and exported crude products be paid transacted in Euros. 

The measure is designed to bypass financial sanctions President Donald Trump's administration leveled against Venezuela's government last month for jailing political opponents and creating a super body of pro-government delegates that bypasses all institutions. -Fox Business

Venezuelan President Nicolas Maduro said that Venezuela was looking to “free” itself from the U.S. dollar, According to Reuters,

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.

Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

Meanwhile, Venezuela's bolivar has lost nearly all of its value as the country spirals into an economic crisis.

"There's no way they can get anything under control in Venezuela unless they dollarize," says Steven Hanke, a professor at Johns Hopkins University who advised the governments of Ecuador and Montenegro when they ditched their currencies for the dollar. "The bolivar is gone already." -CNN

"Dollarization is a solution, but it's not the optimal solution," says Jean Paul Leidenz, senior economist at Ecoanalitica, a Venezuela-based research group. "It's an extreme measure."

Historical precedent suggests that dropping the U.S. dollar is ill advised. If the economic hitmen don't punish countries seeking to circumvent the greenback, other types of hitmen will be sent in to finish the job.

Comments

directaction Mon, 04/09/2018 - 20:52 Permalink

The one feel-good story of the day.

Turkey imports 100% of its oil,

Hopefully all of it will be paid for without Great Satan money. 

Let's hope it comes true. And with more countries, too. 

Thank you, Tyler.

Blankone directaction Mon, 04/09/2018 - 20:57 Permalink

Good Story? Good grief, Russia is using the dollar even to trade oil with Iran. DID YOU GET THAT.
Russia and Iran must use the DOLLAR even to do oil trade between EACH OTHER.

Good Grief Russia!!! How can that be? And articles/ZH posters claim Russia has some alternative to SWIFT. Putin does not even have Russia ready to trade oil outside the dollar or without SWIFT. And anyone thinks Russia is ready for any type of War? They cannot function without the dollar and SWIFT.

In reply to by directaction

rejected Arnold Mon, 04/09/2018 - 21:41 Permalink

Your forgetting Russia has been accumulating a LOT of gold. I think they're the third largest holder now. Probably the second as most likely the US is (as usual) lying through their teeth about the supposed 8000 tons. I'd wager that was stolen long long ago.

In reply to by Arnold

OliverAnd directaction Mon, 04/09/2018 - 23:22 Permalink

The Iranian and Turkish currencies are not doing well.  They have lost nearly 2.5 to 4 times their value in the past 6-7 years; TRY 2.5, IRR 4.  They cannot import products due to their cost and are unable to complete major projects in their countries that require foreign parts/machinery and expertise.  Both the Iranian and Turkish economies are suffering because of this... Turkey much more than Iran.  The poor are exponentially getting poorer and the rich are leaving for countries they had invested years ago... this is a recipe for great domestic disturbances in the near future.

In reply to by directaction

NVTRIC Bill of Rights Mon, 04/09/2018 - 22:03 Permalink

The truth wants to be known.  It is only our own egos, the perpetual blue pill provider, that creates doubt and fear.

 

This analogy extends well to the perpetual red team versus blue team.  Blue team lies and gets away with it, celebrates it.  Red team champions truth and gets shit on for pointing it out and hurting others with reality and consequences.

 

 

In reply to by Bill of Rights

Jack Oliver NVTRIC Tue, 04/10/2018 - 00:39 Permalink

This whole thing got intense when Russia reunited with Crimea !! 

It hasn’t happened ‘overnight’ - The ‘Petro -Yuan’ has sped things up considerably ! 

Once the physical might of Russia - China - Iran is challenged ( and that could be FUCKING tomorrow) - well - the Zio/US demise will be swift !! 

In reply to by NVTRIC

MusicIsYou Mon, 04/09/2018 - 20:59 Permalink

Yeah but the U.S sanctioned Russia and dropped the dollar for them already. That's what the U.S does when it sanctions countries, cutting said country off from dollars. The American people aren't very bright. In fact most Americans are just plain stupid, the epitome of why the U.S ranks 35th place on the list of first world country comprehension.

HRClinton MusicIsYou Mon, 04/09/2018 - 21:58 Permalink

"the epitome of why the U.S ranks 35th place on the list of first world country comprehension."

And that is why smart kids, who want to study at a REAL university (that is high in global rankings) do 2 things, to be able to study there:

1. Attend the Top 3-10 high schools in the state (one of top 3 if it's in a small state, and one of top 10 if it's a populous state)

2. Take tons of AP (Advance Placement) classes.

95% of US high schools are considered too inferior, to have their grads accepted abroad.

What a disgrace, for a nation to sink so low and to 'stink' so high.

In reply to by MusicIsYou

Money_for_Nothing Mon, 04/09/2018 - 21:07 Permalink

Turkey and Iran are untrustworthy at the billion dollar level. Hillary and Obama were turning US into Russia, Iran, and Turkey. Trump is a turning away from isms an moving back to individual initiative. Who trusts Russia? Who trusts DC?

new game Mon, 04/09/2018 - 21:15 Permalink

so russia gets a shit ton of lira for oil. cool beans. now what? buy turkish real estate? to get it back to rubbles

their needs to be conduit for demand for lira. bonds to finance this balance sheet nightmare. who the fuck would carry this crap?

turkey isn't what i'd call a good risk. but maybe this partnership needs a sponsor like china. hmmm. didn't they just set up an exchange? to do exactly this. murica is shooting it's feet and soon will be chopping off both arms. somebody pull the trigger before the last arm can't suicide itself...

 

TRM new game Mon, 04/09/2018 - 21:46 Permalink

What they need is each country to pay in something that is protected from the fiat currency inflation. Gold, silver etc. The PM stays in China, Turkey, Iran, etc but you can keep it there until you need to buy some electronics, oranges and whatever Iran makes. 

Your purchasing power in a foreign country is protected from being Venezuela'd into nothing. You use it when you need it. That means each country needs to focus on producing something of value to others. Produce or perish. 

In reply to by new game

VWAndy Mon, 04/09/2018 - 21:17 Permalink

  There is no valid reason a producer should not be able to trade his stuff for whatever they want to. Direct trade between two producers to me seems the smoothest possible deals. Keeps all the middlemen on the shortest leash?

Chief Joesph Mon, 04/09/2018 - 21:47 Permalink

This is old news.  It happened last year when the Chinese and the Russians signed the agreement to trade in yuans, and when the Russians forbid any exchanges of dollars at its ports.  The pressure is on Turkey to do the same.

squid Mon, 04/09/2018 - 23:27 Permalink

If this does not illustrate the "illusion of permanence", nothing ever will.

 

The fact that the Khazar knobs running this want to force people OUT of the dollar shows just how deluded these dumb fucks are.

 

Force them into an alternative....brilliant.

And an alternative will arrive and then the beloved FRN that we have had since 1913 can disappear but boy is boy is that transition going to hurt.

 

Squid