F. William Engdahl: Russia aims to break Wall Street's monopoly on oil prices

Russia has just taken significant steps that will break the present Wall Street oil price monopoly, at least for a huge part of the world oil market. The move is part of a longer-term strategy of decoupling Russia's economy and especially its very significant export of oil, from the U.S. dollar, today the Achilles' heel of the Russian economy.

Later in November the Russian Energy Ministry announced that it will begin test-trading of a new Russian oil benchmark. While this might sound like small beer, it's huge. If successful, and there is no reason why it won't be, the Russian crude oil benchmark futures contract traded on Russian exchanges will price oil in rubles and no longer in dollars. It is part of a de-dollarization move that Russia, China, and a growing number of other countries have quietly begun.

The setting of an oil benchmark price is at the heart of the method used by major Wall Street banks to control world oil prices. Oil is the world's largest commodity in dollar terms. Today the price of Russian crude oil is referenced to what is called the Brent price. The problem is that the Brent field, along with other major North Sea oil fields, is in major decline, meaning that Wall Street can use a vanishing benchmark to leverage control over vastly larger oil volumes. The other problem is that the Brent contract is controlled essentially by Wall Street and the derivatives manipulations of banks like Goldman Sachs, Morgan Stanley, JP MorganChase, and Citibank.

The sale of oil denominated in dollars is essential for the support of the dollar. In turn, maintaining demand for dollars by world central banks for their currency reserves to back foreign trade of countries like China, Japan, or Germany is essential if the dollar is to remain the leading world reserve currency. That status as world's leading reserve currency is one of two pillars of American hegemony since the end of World War II. The second pillar is world military supremacy. ...

DYI Comments:  The game is on as Russia fights back against the almighty U.S. Dollar.  With all of Russia's problems this is a long shot at best.  However, it is a good idea from a Russian point of view to bring back into the fold at least economically many of the countries during the Soviet Union.  At least that is Russia's attempt.  I'll be watching to see if this new trading floor dominated in Rubles has any staying power and possible growth.

DYI