In place of humiliating Russia, the “economic war” that Washington and Brussels had promoted was counterproductive, since it only contributed to fortify the energy team between Moscow and Beijing. We recall that in May of 2014 the Russian company Gazprom agreed to supply gas to China up to 38 billion cubic meters annually during three decades (starting in 2018) through the signing of a contract for 400 billion US dollars with the China National Petroleum Corporation (CNCP) [1]. At the present time both powers coordinate the work of an ambitious plan of strategic projects that include the construction of gas and oil pipelines as well as the combined operation of refineries and large petrochemical complexes. Without proposing to do so, the coming together of Moscow and Beijing has produced deep changes in the world oil market in favor of the Orient, dramatically undermining the influence of Western petroleum companies.
Even Saudi Arabia, that until recently was the principal supplier of petroleum to the Asian giant, has been undermined by Kremlin diplomacy. While from 2011 the petroleum exports of Saudi Arabia to China were growing at a rhythm of 120 billion barrels per day, those of Russia grew at a velocity of 550 billion barrels per day, that is to say, almost five times more rapidly. In fact, in 2015 the Russian companies managed to overcome the sales of petroleum from the Saudis four times: Riyadh had to conform with being the second provider of crude to Beijing in May, September, November and December [2].
It is worth noting that the countries that make up the European core have also seen their share of the market diminished in the face of the Asian region: Germany, for example, was supplanted by China at the end of 2015 as the greater buyer of Russian petroleum [3]. In this way, the great investors operating in the world oil market can hardly believe how, in a few months, the principal purchaser (China) became the favorite client of the third major producer (Russia). In accord with the Vice-President of Transneft (the Russian company charged with the implementation of national oil pipelines), Serge Andronov, China is disposed to import a total volume of 27 million tones of Russian petroleum during 2016 [4].
The Russian-Chinese energy alliance is proposed to go longer. Moscow and Beijing have made their interchanges of petroleum a channel of transition towards a multipolar monetary system, that is to say, a system that is no longer based on the dollar alone, but takes into account various currencies and above all, that reflects the correlation of forces in the current world order. The economic sanctions imposed by Washington and Brussels drove the Russians to eliminate the dollar and the euro from their commercial and financial transactions, since otherwise, they would be too exposed to suffer sabotage in the moment of realizing buying and selling operations with their principal trading partners.
For this reason, from mid-2015, the hydrocarbons that China buys from Russia are paid in yuans, not in dollars, information that has been confirmed by high executives of Gazprom Neft, the petroleum branch of Gazprom [5]. This has lead to the use of the “people’s currency” (‘renminbi’) in the world oil market and at the same time allows Russia to neutralize the economic offensive launched by the United States and the European Union. The underpinnings of a new financial order supported by the petroyuan is emerging: the Chinese money is preparing to become the axis of commercial exchanges of the Asian-Pacific region with the principal petroleum powers.
Today Russia realizes its interchanges of petroleum with China in yuans, in the future the Organization of the Petroleum Exporters Countries (OPEC) will do the same if China demands it. Or will the cult of Saudi Arabia for the dollar make them lose one of their principal clients? [6] Other geoeonomic powers have already followed the path of Russia and China, since they have understood that in order to establish a more balanced monetary system, the “de-dollarization” of the world economy is a priority.
No less important is that after the fall of oil prices, more than 60% (from mid-2014), the Chinese banks have become a decisive financial support for the joint energy infrastructure works. For example, to establish as soon as possible the Russian-Chinese gas pipeline “Force of Siberia”, Gazprom requested from the Bank of China a five-year loan for an amount equivalent to 2 billion euros this past month of March [7]. This is the greatest bilateral credit that Gazprom has contracted with a financial institution to date. Another example is the loan that China gave Russia some weeks ago for a total of 12 billion US dollars for the Yamal LNG project (for liquefied natural gas) in the Arctic region [8]. Obviously, the foreign policy of Russia in energy have not lost any strength due to isolation, on the contrary, it is now enjoying its best moments, thanks to China.
In conclusion, the hostility of the leaders of the United States and the European Union against the government of Vladimir Putin has precipitated the strengthening of the Russian-Chinese team that at the same time has only increased the weight of the Orient in the world market of hydrocarbons. The great bet of Moscow and Beijing is the petroyuan, the strategic instrument of payment that brings with it a challenge to the dominion of the dollar in the fixing of prices for black gold.
Originally appeared at Voltairenet. Translated by Jordan Bishop from Spanish at RT
Poster Comment:
John Tosh...Unfortunately not even a war can save the US Dollar. The world now realizes the Dollar is not an asset, it is a liability. Using Dollars allows the CIA to do whatever it wants to your country. This is why so many countries are hoping the Dollar fails even poor countries. As the Dollar collapses, those good old southern boys would wage war on the rest of the world. The only problem is this time they will get their teeth kicked in, their butts flogged and go back home with their tails between their legs begging. Then hell would be unleashed in the West. McCain represents the old dry ideas of the Central Intelligence Agency. Full of cloak and dagger nonsense similar to the James Bond movies they grew up watching. Not realizing the new world has no place for such nonsense. The new world has internet access up to the jungles of Africa or the Amazon. The new world has access to thousands of books or materials just by accessing the internet. Nothing is so special any more. The Chinese can copy or produce anything they want without getting "permission" from the old dry men of the West! Can somebody please save the USA from the Central Intelligence Agency before they sink it? There are bigger problems ahead yet we have the same group of demented morons running the affairs of the US. They have failed in almost every single endeavor regardless of the fact many other people within the US have better plans than the CIA. The CIA uses brute force (murders) to push forward its useless policies and in the end the country has steadily declined while other countries have been rising. Russia is rising, China is rising, even African countries are doing better. The USA on the other hand has been degenerating year in year out. Even a child can tell that the USA is not doing any better. Is it not time to change those at the top? The real government of the USA has been the CIA for over 50 years now. Those fifty years have seen a steady decline in US infrastructure, power, wealth, morals, family values....etc one can go on and on. It is obvious the only thing the USA can do now is get rid of the Central Intelligence Agency for good in order to cure itself of this destructive cancer. A cancer of lunatics.+10
Tatarewicz /John Tosh • The real government of the USA has been the Israeli lobby, neocons, Sayanim which make sure only law and policy makers friendly to Israel get elected and that Israel-serving agents get into CIA, TSA, think tanks that supply policy direction and personnel to government and who together with Jew-controlled MSM promote Israel's security at the expense of domestic infrastructure and other needs of Americans.
donhank • Yes, the value of a currency is closely linked to its use in world trade. China's top monetary policy expert Chen Yulu said this in a famously ignored interview in 2014. It was never translated by the msm but a tiny web site happened to carry it http://www.renewamerica.com/co.... Western "journalism" is hell bent of keeping vital events and facts hidden from everyone. We are in for SUCH a surprise! Barring a miracle, the USD is toast.
helen • The choice is for Americans to accept their country bankruptcy and repent or bankruptcy together with the nuclear annihilation of the entire United States! The ordinary Americans would prefer the former while the neo-cons in the US would want to risk the latter.
donhank helen • Fortunately, 3 of the most prominent Neocons have all come out in the last few months warning that we have to stop provoking Russia to avoid nuclear war at all costs. They were Kissinger, George Foreman and Soros. This could signal a major change.