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India-Russia Oil for Rubles Deal Another Sign of Rapid Dedollarization

© AP Photo / Martin MeissnerOne hundred rubles banknote is pictured in front of a one US dollar banknote, Gelsenkirchen, Germany, Monday, April 25, 2022.
One hundred rubles banknote is pictured in front of a one US dollar banknote, Gelsenkirchen, Germany, Monday, April 25, 2022.  - Sputnik International, 1920, 31.05.2024
On Wednesday, it was reported that India’s largest private corporation Reliance Industries and the Russian energy company Rosneft signed a one-year agreement for up to three million barrels of oil per month that will be paid in Russian rubles, putting another nail in the coffin for the US dollar’s hegemony.
The transactions will be handled by India’s HDFC Bank and Russia’s Gazprombank, outside of the Western SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment system and immune to the illegal unilateral sanctions placed on Russia by the West.
After the start of Russia’s special military operation in Ukraine, Western countries greatly reduced their purchases of Russian oil and gas in a move that was intended, but failed, to cripple the Russian economy.
An aerial view shows Red Square, in Moscow, Russia.  - Sputnik International, 1920, 31.05.2024
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Since the Western existential economic war of sanctions [against Russia] began in 2022, India’s imports of Russian oil have soared. In fact, the country’s imports of Russian oil have soared tenfold in just 2023,” explained security and international relations expert Mark Sleboda on Sputnik’s The Critical Hour. “So they are buying Russian oil. They’re [getting] a good price on it, making their products more competitive and Europe isn’t getting that cheap, reliable oil.”
While India’s purchase of Russian oil angered the United States, it has been hesitant to punish India because it sees it as a potential ally in a future war with China.
“The US keeps trying to rope India into fighting China, serving as proxies for it in their future war with China, which means they don’t want to alienate India too much,” Sleboda said.
The decision to make purchases in rubles rather than Indian rupees or US dollars represents another step in de-dollarization that has been spreading across the globe. In the late 1970s, the US dollar represented 85% of global reserve currencies. By 2022, that number had fallen to 58.4%, a trend that has been exacerbated by Western sanctions imposed by Russia and the illegal seizure of Russian assets held in US banks, a decision by the West that had led other world leaders to question the dollar’s dominance.
“Every night I ask myself why all countries have to base their trade on the dollar,” Brazilian President Luiz Inácio-Lula da Silva said during a speech in China last year. “Why can’t we do trade based on our own currencies? Who was it that decided that the dollar was the currency after the disappearance of the gold standard?”
If the US continues on this path, more countries will follow suit, Sleboda predicts. The more the West uses sanctions and payment systems as a weapon in foreign policy, “more of the world’s economy [will slip] outside of their grasp.”
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