Gazprom Neft, a subsidiary of Gazprom and one of Russia’s major oil producers, has made a significant shift in its export settlements by reducing its reliance on the US dollar and euro. CEO Aleksandr Dyukov announced during the TNF energy forum in Siberia that the company has almost completely abandoned these two currencies and instead conducts most of its export transactions in Chinese yuan and Russian rubles.
Dyukov highlighted that Gazprom Neft has faced no issues in withdrawing its export earnings in foreign currency. The company receives revenue from oil and petroleum product sales promptly. This move is part of Russia’s broader strategy to decrease its dependence on the dollar and euro, as it increasingly views these currencies as unreliable due to various sanctions imposed upon the country.
Last year, Russia notably increased the use of national currencies in its trade transactions. This shift away from the euro and dollar is driven by the desire to mitigate the risks associated with potential restrictions on the use of international currencies. By embracing the yuan and rubles, Gazprom Neft aims to bolster its resilience against external economic pressures.
However, it is worth mentioning that the company does not utilize India’s currency, the rupee, in its export settlements. While it has embraced the yuan and rubles, Gazprom Neft has not expanded its use of other national currencies beyond China and Russia.
The decision to switch to yuan and rubles aligns with the broader trend of de-dollarization observed in global markets. Russia is not the only country seeking to reduce its dependence on the US dollar, as other nations like China and Iran have also made efforts to promote the use of their own currencies in international trade. This shift reflects a desire to create alternative financial systems and reduce vulnerability to potential currency manipulations by dominant global economies.
Gazprom Neft’s move away from dollar and euro settlements contributes to the ongoing diversification of global currency reserves. As more countries opt to transact in alternative currencies, the influence of the dollar and euro in cross-border trade is gradually diminishing. This development is significant as it challenges the traditional dominance of Western currencies and promotes a more multipolar currency system.
In conclusion, Gazprom Neft’s decision to prefer yuan and rubles over the US dollar and euro in its export settlements reflects Russia’s broader strategy of de-dollarization. By reducing reliance on international currencies, Gazprom Neft aims to safeguard itself against potential economic and geopolitical risks. This shift aligns with the global trend of de-dollarization, which seeks to establish alternative financial systems and reduce dependence on the dominance of Western currencies.