On Wednesday, Reuters reported that Western sanctions on Russia and the Moscow-India oil trade have begun to erode the dollar’s dominance in international oil trade for decades. Oil deals between India and Russia have been settled in other currencies, putting the US dollar’s dominance in oil trade under pressure.
Sources say non-US currencies used in India-Russia oil deals total ‘several hundred million dollars’
Over the past few months, Bitcoin.com News has reported on several cases where analysts and economists suggest that Brazil, Russia, India, China, and South Africa, collectively known as the BRICS nations, are attempting to undermine the US dollar. On March 8, Reuters columnists Nidhi Verma and Noah Browning reported about how India’s oil deals with Russia have dented the dominance of the US dollar in the international oil trade.
Oil traders and banking sources told reporters that Indian clients are paying for Russian oil entirely in non-US denominated fiat currencies, including the United Arab Emirates (UAE) dirham. The sources said that in the past three months, the deals have represented “several hundred million dollars” in transactions between the two countries. Three sources with direct knowledge of the matter chose to release the information anonymously due to the “sensitivity of the issue.”
The report is not the first time. accounts and sources have pointed out that India is reportedly get oil from Russia at a significant discount. The estimated price cap of $60 per barrel was reported several times last year. has also been alleged that a lot of oil is simply making its way back to European filling stations after India allegedly sells the crude for a premium.
A former chief economist at the US State Department, Daniel Ahn, told Reuters on Wednesday that the “strength of the dollar is unmatched.” Ahn called the Russian Federation’s moves “transitory gains” that won’t have much effect. “Russia’s near-term efforts to try to sell things for currencies other than the dollar are not the real threat to Western sanctions,” Ahn said in a statement.
What impact do you think Indian and Russian oil deals set in non-US currencies will have on global oil trade and the dominance of the US dollar in it? Share your thoughts on this topic in the comments section below.
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