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Putin challenges dollar by calling for the rouble to be used globally for energy

Russian President Vladimir Putin
Photo by Chris Jackson/Getty Images

On Aug. 13, Russian President Vladimir Putin announced that the old petrodollar system of using a singular currency for global energy sales is damaging the economy, and that he intends to pursue using the rouble as an alternative form of currency through which nations can buy oil from the Eurasian power. In his brief statement to the press, Putin emphasized that the continuing use of the dollar as a global standard allows the United States to inflict damage to countries throughout the world, especially as the central bank continues to devalue the dollar through Quantitative Easing and unlimited money printing.

Additionally, Putin in the past has recognized that the use of the dollar as the sole medium for global transactions is a hindrance to free trade by forcing nations to have to buy dollars first before purchasing oil, food, and other commodities on the global market, even if those purchases are being made with nations outside of the U.S. This restrictive system has led to the formation of an alternative trade coalition known as the BRICS, and the establishment of a BRICS bank, along with the recreation of the Silk Road via the Eurasian Trade Zone.

President Vladimir Putin said on Thursday Russia should aim to sell its oil and gas for roubles globally because the dollar monopoly in energy trade was damaging Russia's economy.

"We should act carefully. At the moment we are trying to agree with some countries to trade in national currencies," Putin said during a visit to the Crimea region, which Moscow annexed from Ukraine earlier this year. - Reuters

The use of economic sanctions by the United States against Russia has only led the Eurasian state to accelerate their move to end dollar hegemony and to bring about the creation of a new global financial system. In just the past two years, Russia has broken the tradition of mandatory use of the petrodollar in their oil sales made to both Iran and to China, and now they are preparing for a similar breakaway by European countries who rely upon Russian oil and natural gas for nearly 40% of their energy needs.

Vladimir Putin took several months before responding to U.S. economic aggression after Washington began a series of sanctions directed at the President, and at other Russian oligarchs. But once he chose to act, there has been no stopping the surge of changes he is seeking to impose on the Western system of dollar hegemony. And with several trade partners like China, Brazil, India, and South Africa already on board, Putin appears ready to take on the dollar worldwide by calling for future energy sales from his nation to be done in roubles, and no longer with the petrodollar.