Russian oil companies to drop dollar in deals

Russian major oil companies are approaching plans to stop using dollar in its trades making moves to substitute euro and other currencies in petroleum transactions.
Publish date : Monday 24 September 2018 11:17
Code: 361535
 
Surgutneftegas was quoted by media as announcing that it had informed at least one of its customers that it would receive payments for oil sales in euros and other currencies.

According to a message sent by Surgutneftegas to one of its customers, the oil company said it wanted to “avoid any possible problems with payment in USD,” Reuters reported.  

The reported move came in line with recent comments from the Kremlin that Russia was taking measures to move away from the greenback.

Over the past months, Russia has repeatedly raised the possibility of replacing the US dollar with other currencies in its transactions with the outside world in response to the US sanctions.

Last month, Finance Minister Anton Siluanov said Russia could reject the US dollar in oil trade.

“It is not ruled out. We have significantly reduced our investments in US assets. In fact, the dollar, which was considered the global currency, becomes a risky instrument for settlements,” he was quoted by media as saying.

Russian Energy Minister Aleksandr Novak also recently said that the government was considering the possibility of oil settlements in national currencies, especially with Turkey and Iran.

“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.”

Reuters further reported that Gazprom Neft – Russia’s third-biggest oil company by output – was also considering a plan for payment settlements in non-dollar currencies.

It quoted a company source as saying that Gazprom’s contracts already had a clause to trade without the US dollar.  

Rosneft – Russia’s largest oil company – was also reported to be interested in diversifying. Reuters added in its report that the company had opened banking accounts in Hong Kong dollars and Chinese yuan.

Rosneft has also prepared itself for the shutdown of SWIFT interbank cash transfer services, should Russia be shut out of the system as part of Western sanctions, the news agency added. A Russian equivalent of SWIFT was tested by Rosneft in December.

Russia accuses the US of politicizing the dollar and undermining the global trust in its currency by imposing restrictions on settlements in dollars.

Russian President Vladimir Putin in July underlined that Washington has undermined trust in its currency by using it as an argument in political disputes.

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