Reuters recently reported that Western sanctions on Russia and energy trading between Moscow and India have begun to erode the decades-old dominance of the U.S. dollar in international oil trade. The oil deals between the two countries have been conducted using other currencies, putting pressure on the greenback’s supremacy in the oil market.
Sources Report Non-Dollar Currencies Used in India-Russia Oil Deals Total ‘Several Hundred Million Dollars’
Throughout the past few months, Bitcoin.com News has documented various instances when analysts and economists have suggested that the BRICS nations (Brazil, Russia, India, China, and South Africa) are making efforts to weaken the U.S. dollar. On March 8, Reuters columnists Nidhi Verma and Noah Browning reported on how India’s oil deals with Russia have created a “dent” in the dollar’s long-standing control of the global oil trade.
Oil traders and banking sources told the reporters that Indian customers are solely using non-U.S.-denominated fiat currencies such as the UAE dirham to pay for Russian oil. The sources added that these types of transactions have added up to “several hundred million dollars” over the last three months. All of the sources who spoke to the journalists decided to remain anonymous due to the “sensitivity of the issue.”
This is not the first time reports have emerged that India is allegedly purchasing oil from Russia at a discounted rate. Last year, various accounts and sources reported that a $60-per-barrel price cap was in play. Additionally, it has also been speculated that a great deal of the crude ends up at European petrol stations after India is said to have resold the oil at a premium.
Daniel Ahn, former chief economist at the U.S. State Department, commented on the matter to Reuters on Wednesday and called the moves by the Russian Federation “transitory gains” that won’t have much effect. He said: “Russia’s short-term attempts to try and sell things in return for currencies other than the dollar are not the real threat to Western sanctions.”
What do you think will be the result of India and Russia’s oil deals being settled in non-US currencies? Share your opinion in the comments section below.
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