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Russia is Preparing to
Bypass the Petrodollar System

Currently, the US dollar is still the World's base currency in trading energy, including oil.

The petrodollar system attributes tremendous strength to the US dollar, because whenever a country requires to buy oil from a petrodollar system-using oil producer, it will have to purchase US dollars in order to pay.

(Here's an explanation of how the petrodollar system works).

But, Russia is about to bypass the petrodollar system by creating their own ruble-based payment system. If this happens, it'll be a heavy blow to the US dollar.

This comes as a response to recent financial sanctions against Russia, imposed by the Western countries.

According to recent news appearing in the Russian press, Russia intends to phase out the dollar in selling not only oil, but also their natural gas and other commodities, as well as weapons.

In addition, Russia will also sell their natural gas and other commodities in their own currency.

At this time, Russia is selling commodities in US dollars and euros, contributing to the demand for these leading currencies.

Russia is the biggest producer of oil and natural gas in the World. If Russia starts bypassing the petrodollar system, it will hit the dollar heavily.

Russia is creating a commodity exchange that uses rubles as a reference price, instead of US dollars.

Allegedly, this commodity exchange will not only intermediate the sale of Russian commodities, but also oil coming from Iran (for which Russia could barter various goods).

Iran's oil could then possibly enter the global market through the Russian exchange.

In addition, China and India will be Russia's future big buyers of oil, according to recent news.

If this scenario will start to unfold, Russia will be less vulnerable to the West's sanctions, but the dollar and the euro would be negatively affected.

Are we seeing the prelude to the creation of the petroruble?

Russia is yet another country attempting to ditch the US dollar in selling oil (and other commodities, goods as well), but unlike previous attempts (Venezuela, Iran etc.), this one could have catastrophic effects on the US dollar.

One thing is certain - if this starts happening, it will amplify the trend.

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