Russian oil firm says Asian buyers willing to use euros

[Raphael]

Russian oil firm says Asian buyers willing to use euros| Reuters

(Reuters) - Russian state-controlled oil producer Gazprom Neft said it had received positive responses from Asian clients about the possibility of using euros as a settlement currency instead of the dollar.

Company head Alexander Dyukov said this week Gazprom Neft had broached the idea of dropping the dollar, traditionally the currency of choice for the global energy sector, in response to a possible new round of Western sanctions over Russia's annexation of Crimea.

He said the company had discussed with buyers the possibility of switching contracts to euros and that 95 percent had said they were ready to do it. Gazprom Neft ships around 30,000 barrels per day of oil eastward.

"Gazprom Neft has held discussions with its eastern partners about the possibility of completing settlements in the European currency. They, in turn, expressed their potential readiness for this," the oil arm of top Russian top natural gas producer Gazprom said in emailed comments on Thursday.

Three buyers in Japan and China said they had been approached by Gazprom to settle oil payments in currencies other than the dollar. Two of the buyers said they were still considering the proposal, while the third said his company had bought crude using euros before and did not see it as a problem.

"Switching to euros is not a big deal. The problem is who will bear the exchange cost," a trader with a Japanese buyer of Russian Asia-bound ESPO crude oil blend said.

The United States and the European Union have already imposed some sanctions, mainly on individuals, over the Crimea crisis and have threatened more sanctions if Russia sends troops into eastern Ukraine.

Moscow has reserved the right to send in troops if it deems them necessary to protect Russian speakers in Ukraine from what it says are nationalist and neo-fascist groups.

REAL MEASURES?

President Vladimir Putin has urged Russian companies to forge closer ties with Asian energy powerhouses as relations with Europe and the United States have become frosty.

Earlier on Thursday, First Deputy Prime Minister Igor Shuvalov said Russia had potential partners to turn to for oil and gas trade other than in the West.

Analysts said the proposal to use euros instead of dollars was rhetoric rather than an immediate possibility.

"It's obvious that the shift from the existing system of settlements is fraught with costs and does not promise benefits" for Russia, Valery Nesterov, an analyst with Sberbank CIB in Moscow, said.

"It is more likely about future contracts, not current deals, as the settlement currency had been already agreed."

Some traders have been sceptical about the prospect that Russian companies could drop the use of dollars for settlements, because countries with close political ties to the United States, such as Japan, could find such a switch too politically sensitive to agree.

One ESPO buyer in Japan said his company did not have direct dealings with Gazprom Neft but that he was aware of some requests being made.

If Russia was serious about such a shift, the big sellers such as Gazprom and state oil company Rosneft would be looking at similar moves, but so far there have been no signs of that, he said.

"I think they are just testing the market," he said.

Rosneft Chief Executive Officer Igor Sechin, a long-standing ally of President Vladimir Putin, said on Thursday the company would use settlement currencies that have already been agreed in contracts, according to local media reports.

Game over for the petro-dollar.

 

[Chinese-Dragon]

The dollar is strong because it is the world's reserve currency, due to oil being priced in dollars.

But if the world's number 1 oil producer (Russia) stops using it, that will be a big blow to the status and the strength of the dollar.

 

[Black Eagle 90]

Russian oil firm says Asian buyers willing to use euros| Reuters



Game over for the petro-dollar.

China can and will buy Oil and Gas from Russia and we would like to see Asian investment there...

 

[American Eagle]

Russian oil firm says Asian buyers willing to use euros| Reuters



Game over for the petro-dollar.

It is going to be impossible for Russia to totally switch to Euros vs. the dollar because the US and Russia in a joint venture from more pleasant times each own 50% of the world's largest oil refinery built (jointly) in Houston, Texas, USA.

 

[Sergi]

It would be a very bold move. And nodoubt will help to create a multipolar world reducing American power over world economy.

It is going to be impossible for Russia to totally switch to Euros vs. the dollar because the US and Russia in a joint venture from more pleasant times each own 50% of the world's largest oil refinery built (jointly) in Houston, Texas, USA.

Further Santions will close that JV too

 

[American Eagle]

The world's international exchange and trade gold supply is held in vaults inside the New York Branch of the Federal Reserve Bank..

Gold is literally, manually, shifted to and from various gold bins per nation over time as balances of trade so justify.

The US of course deals in dollars. The UK deals in Pounds Sterling, and the UK does not belong to the Euro currency block of nations. Hence, a major part of all world trade operates between the US and the UK in both dollars and in Pounds Sterling.

If folks haven't noticed the US is mad at mainland China due to recent floating valuations of the Chinese currency vs. the US dollar.

Russia can choose to deal in Euros but the other nations she trades with can deal in their national currency, in fact, which most do.

Use of an agreed on common currency, the Euro, by the "United States of Europe" creates a level playing field where the Euro currency member nations cannot and do not try to make extra profits between competing, different currencies. Russia has that factor of deal with, too.

Back to the world's gold supply which is "banked or kept" in the New York Federal Reserve Bank. The Bank for International Settlements in Switzerland is the back office or monetary payment transactions center for the entire trading world. However accounts between any group of nations involved in same related transactions (which can involve sometimes more than just two nations) do so via the Bank for International Settlements in Berne, Switzerland. Trade monetary settlements then are reflected in physical, literal shifts at some point in time between whole nations at and inside the New York Federal Reserve Bank's gold vaults for each/all nations.

A side point: The Berne, Switzerland Bank for International Settlement since the mid-1970s has Special Drawing Rights allocated for credit expansion to and with various nations, particularly poorer and developing nations whose ability to fully pay for or "cover" total costs of their sorely needed imports from more developed nations is often "covered" with SDRs for any current trades points in time when poorer or developing nations can't pay on a 100% cash basis, so to speak, for their imports at various points in time. SDRs are yet another type of international trade currency in the form of a credit, using credit to expand or inflate poorer nations ability to do worldwide business partially based on use of their allotted SDRs, which are trade supporting forms of a "credit currency enhancement" to their ability to pay bills beyond their existing balance of trade accounts in whatever currency the poorer nations use to deal in.

What does all this technical stuff tell you? It says that Russia does not control who uses which world currency. However, if Russia chooses to use the Euro to settle their international trade accounts the Russians would be or will be undermining the value of their own national currency, the Ruble. Now how stupid is that for the Russians to ruin their own ruble?

 

[senheiser]

so this meanS petro euro? china needs to finally make their currency convertible so it can be used for recourse trade

 

[Tshering22]

What basically needed here is to have a common valuation of the local currencies of BRICS countries.

A recent test of BRICS countries was taken during Ukrainian crisis and we all managed to stick together despite very diverse economic, cultural, military and financial environments. This was a test of geopolitical capability. The best part is, none of these countries (barring us and the Chinese) have any barbs with each other; and from the looks of it, we may even end up sorting out our own mutual issues and solve them. If this happens, we have a strong combination of powerful countries coming together.

One of our members, South Africa, seems to be a bit apprehensive; however, with greater economic integration and the planned independent internet system proposed in BRICS countries, I think we should do something about our currencies too. I am not a financial expert but if there is a means to equalize all the BRICS countries vs the USD or EUR, we can even create a benchmark for a common currency reserve of all five countries which can be directly exchanged for goods.

But there has to be an alternate to USD; if not completely, at least partly. The whole control of printing over US fed reserve is causing too much economic damage worldwide.

 

[American Eagle]

Thanks for your comments.

1. The US Treasury, not the US Federal Reserve Bank, prints our currency, the US dollar.

2. Most international banking exchanges involving the USD are done using "bookkeeping dollars." A series of debits and credits. The terms "Euro dollar" and "Asian dollar" refer to the USD as used in international business.

3. Real, physical currency does not change hands.

4. Fixed parity between and among various nation's currencies will never happen. Some businesses make money merely by doing currency arbitrage in and of itself. This is why various "business" newspapers such as the WALL STREET JOURNAL here in the US print tables of daily currency comparisons or spreads, using the dollar as the standard.

5. When I was an International banker a long time ago the Swiss franc was an alternate standard, along with the Pound Sterling. But like all other nation's currencies even the Swiss franc did and does still today fluctuate in value.

6. THEN came the Euro, which has been the 2nd best standard for some years now. My late Cousin, who worked out of Dubai and London, traveled about 1/3 to 1/2 the world as a corporate President. He had about 1,500 employees under him. He told me once that when hired by his corporation he had a choice to be paid in dollars or Euros. He was British by birth (his Mom is my Cousin)...but the Pound Sterling was not an option for him. He chose the dollar and said over the years it was more stable/valuable than the Euro. He died only 2 years ago (still a young man, heart attack) so his monetary unit choices, only two, are still overseas the most common standards, either the USD or the Euro. His corporation was based out of New York City, and he was a Regional President/COO covering much of the Middle East, all of Africa, all of India, Australia and New Zealand. He of course inclusively covering SW Asia per se also covered Pakistan.

 

[Juice]

Lol, the same circle-jerk you idiots have been drooling over for years....this country is gonna destroy the dollar, that country is gonna destroy the dollar, blah...blah ..blah. If you rocket scientist did any real research you would find that Russia's economic gurus are predicting zero growth and capitol is disappearing because everyone is dumping roubles for dollars! Russian delude themselves then the Chinese join in this circle-jerk. What losers.