It’s the end of an era…
I have long warned of the decline of the petrodollar system. This is due in part to both the advent of digital currencies, and a response to U.S. sanctions placed on Russia as a result of her recent military strikes inside Ukraine.
Energy has been a hot button topic amid the recent tensions in the region, as Germany previously announced that it would halt the Nordstream 2 pipeline in response to Russia’s invasion of Ukraine.
Today the conversation has once again shifted to energy, and we are receiving yet another signal that the U.S. petrodollar system is collapsing internationally.
Trending: Noah’s Nightly Newsletter – 5/25/22
Vladimir Putin recently told the world that he wants all energy payments from pro-Western, or otherwise hostile nations, to be made in Russian Rubles as opposed to U.S. Dollars:
⚡️ Putin: Russia will only accept rubles for gas deliveries to EU.
Vladimir Putin said that “unfriendly countries” must pay for Russian energy in rubles & ordered the changes to be implemented within a week.
— The Kyiv Independent (@KyivIndependent) March 23, 2022
The Epoch Times had more on Putin’s new policy announcement:
“We will transition to charging supplies of natural gas and other raw materials in Russian rubles when dealing with unfriendly countries,” Putin said, according to an RT translation of his remarks. “Russia, of course, will continue supplying natural gas and will respect all the obligations and the pricing under the contracts that we have signed.
“We treasure our reputation as a reliable supplier and a reliable partner.”
Brilliant move by Vladimir Putin to sell Russian energy and commodities only against Rubles from now on. Ruble demand boosted. The end of the petrol dollar. Russia has adopted the former US petrocurrency policy. The West now scrambling for rubles
— Professor Richard A. Werner (@ProfessorWerner) March 23, 2022
Remember that right after US sanctions ruble hit $1=155 RUB? Look at what happened today, just hours after Putin announced Russia would sell energy to US/EU only in rubles. This is beyond stabilizing a currency. Today we witnessed the start of the petroruble international market. pic.twitter.com/pl56tJDYzi
— Piero Morosini (@pieromorosini) March 23, 2022
The U.S. has blocked Russian energy purchases, but it’s much tougher for the EU, which gets about 40 percent of its gas from Russia — earning Moscow $30 billion to $40 billion a year. The bloc wants to end its dependency on Russia, but it’s going to take time.
Putin instructed the government and the Bank of Russia to facilitate the purchase of rubles by gas buyers within a week.