In no uncertain terms, Gazprom CEO Aleksander Dyukov outlined Russia’s Economic Warfare plans against the USA in case of further sanctions or any further meddling associate with Ukraine.  To summarize….

• Fundamental Shift & Move From EU/West To Asia/India: As discussed here earlier, Russia is currently making a major push to shift it’s gas and oil markets from the West to the East by signing a number of large longer-term contracts with both China and India.  
• Move Away From The “PetroDollar” As A Reserve Currency: To demand payments for gas and oil in Euro, Yuan, Rubble, Gold or whatever else…..as long as it is not the US Dollar. As the theory goes,  since the US is heavily reliant on it’s Reserve Currency status for it’s ability to maintain a heavy debt load, any move away from the US Dollar would collapse the US Economy.  

I don’t buy this for the time being. Any such move by Russia will have a very limited impact, if any, on the US Economy or it’s financial markets as a whole. The US Financial System is way too large, too well diversified and there are way too many international players involved in the system to destabilize it that fast. Plus, our mathematical work in the Treasury market doesn’t confirm this either. I would give this a second thought if China decides to join Russia, but such a move would be highly unlikely at this juncture.    

In short, Putin might try, but he will fail. His own economy is on the verge of a collapse and he should pay a little bit more attention to that. In fact, if the US wants to finish off Russia it should collapse the price of oil to $20-30 for about 2-3 years and you will see another 1991 type of a regime change in Russia in short order. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Click here to subscribe to my mailing list

 

<p>Russia Outlines It’s Economic Warfare Plans Against The USA Google

 

RT Writes: Gazprom Neft CEO says ditch dollar, look east if sanctions escalate

The oil arm of Gazprom says 95 percent of foreign partners are ready to do business in the euro. The company’s CEO said it could divert exports to Asian markets should the West intensify sanctions.

A study reveals the task in changing currencies is achievable assured Aleksander Dyukov, the Gazprom Neft chief executive.

“This shows that in principle there is nothing impossible – you can switch from dollar to euro and from euro, in principle, to rubles,” as Vedomosti quotes Mr Dyukov.

The Gazprom Neft CEO said it’s important to also study the efficiency of the plan, its probability, and additional losses.

The CEO considers there is a low probability Western banks will reduce cooperation. No one wants geopolitical tension to affect their partnerships. However Gazprom Neft is ready to look to Asian lenders, and raise money in Russia.

“We think Western banks are unlikely to stop cooperating with us, but in any case we have paved a way to Asian lenders as well… plus there is a domestic market,” Dyukov added.

There is an opinion that any restrictions by the US directed at halting dollar operations, in the long-term, may lead the United States to a default, Dyukov says.

“The US currency is already loosing positions…The usage of the dollar as an instrument of punishment may decrease its weight as the reserve currency…Taking into account its huge national debt, at some instant there will be a problem with its refinancing as dollar assets will become interesting to nobody,” the top manager said.

In comments on other possible action by the West, Dyukov said that the US oil sale test on March 14 of 5 million barrels from its own strategic inventories could not shake the world oil market from equilibrium.

“Frankly speaking, I don’t know, what they were guided by. But that was made, in my opinion, as shot by shot to the elephant. The oil market, certainly, can be altered, but for that to happen it needs bigger volumes,” said Dyukov.

According to his calculations the minimal amount of oil to be sold in order to affect the world market should be around 3 million barrels a day long-term.

The head of Gazprom Neft supposes that none of the global oil manufacturers is interested in lowering the price. In particular, in the US where the cost of production of hardly extractable oil is high and any reduction in cost of raw materials will cut a projects’ profitability.

The world oil price remains robust as the May 14 futures of the WTI crude stand at $100.60, while Brent is selling at $105.63