Energy companies ready to ditch dollar

Russia's largest energy providers signal move away from US dollar to other currencies

Surgutneftegas has hinted that it will move away from using the US dollar in oil deals. Image courtesy of Shutterstock.

Russia’s largest energy companies are preparing to ditch the US dollar in favour of other currencies during international settlements.

State news agency Russia Today reported on Tuesday that a growing list of the nation’s biggest oil firms have signaled they are ready to accept other methods of payment, a move in line with recent comments from the Kremlin.

Finance Minister Anton Siluanov said last month that Russia could reject the greenback in oil trade following months of tough sanctions from the Trump Government.

“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 told Russian television at the time.

Oil firm Surgutneftegas, the fourth largest by output, is the latest oil firm prepared to leave the greenback behind. According to a message from Surgutneftegas to one of its customers, the oil company wants to “avoid any possible problems with payment in USD”. A spokesperson for the company refused to elaborate on the quote.

The company joins Gazprom Neft, Russia’s third-biggest oil company by output, in the move. The company said its contracts already have a clause to trade without the US dollar. Meanwhile the largest oil company of them all, Rosneft, is also reportedly interested in diversifying.

The firm has opened accounts in Hong Kong dollars and Chinese yuan, as well as preparing itself for the shutdown of SWIFT interbank cash transfer services should Russia be shut out of the system in future sanctions. The company tested their own equivalent of SWIFT last December.

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

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