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Russia Breaks Wall St’s Oil-Price Monopoly

Posted by drb2 @ 22:54 on January 12, 2016  


there were a couple things in this that I questioned, but overall thought it very interesting.
Russia is more than a bit different from the others that tried to sell their oil for other than FRNs (Iraq, Libya, Iran, Venezuela)

The Demise Of Dollar Hegemony: Russia Breaks Wall St’s Oil-Price Monopoly

Tyler Durden's picture

Submitted by William Engdahl via New Eastern Outlook,

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 US dollar, today the Achilles Heel of the Russian economy.

Later in November the Russian Energy Ministry has announced that it will begin test-trading of a new Russian oil benchmark. While this might sound like small beer to many, 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 US 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 ‘Petrodollar’ demise

The sale of oil denominated in dollars is essential for the support of the US 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 United States 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.

US wars financed with others’ dollars

Because all other nations need to acquire dollars to buy imports of oil and most other commodities, a country such as Russia or China typically invests the trade surplus dollars its companies earn in the form of US government bonds or similar US government securities. The only other candidate large enough, the Euro, since the 2010 Greek crisis, is seen as more risky.

That leading reserve role of the US dollar, since August 1971 when the dollar broke from gold-backing, has essentially allowed the US Government to run seemingly endless budget deficits without having to worry about rising interest rates, like having a permanent overdraft credit at your bank.

That in effect has allowed Washington to create a record $18.6 trillion federal debt without major concern. Today the ratio of US government debt to GDP is 111%. In 2001 when George W. Bush took office and before trillions were spent on the Afghan and Iraq “War on Terror,” US debt to GDP was just half, or 55%. The glib expression in Washington is that “debt doesn’t matter,” as the assumption is that the world—Russia, China, Japan, India, Germany–will always buy US debt with their trade surplus dollars. The ability of Washington to hold the lead reserve currency role, a strategic priority for Washington and Wall Street, is vitally tied to how world oil prices are determined.

In the period up until the end of the 1980’s world oil prices were determined largely by real daily supply and demand. It was the province of oil buyers and oil sellers. Then Goldman Sachs decided to buy the small Wall Street commodity brokerage, J. Aron in the 1980’s. They had their eye set on transforming how oil is traded in world markets.

It was the advent of “paper oil,” oil traded in futures, contracts independent of delivery of physical crude, easier for the large banks to manipulate based on rumors and derivative market skullduggery, as a handful of Wall Street banks dominated oil futures trades and knew just who held what positions, a convenient insider role that is rarely mentioned in polite company. It was the beginning of transforming oil trading into a casino where Goldman Sachs, Morgan Stanley, JP MorganChase and a few other giant Wall Street banks ran the crap tables.

In the aftermath of the 1973 rise in the price of OPEC oil by some 400% in a matter of months following the October, 1973 Yom Kippur war, the US Treasury sent a high-level emissary to Riyadh, Saudi Arabia. In 1975 US Treasury Assistant Secretary, Jack F. Bennett, was sent to Saudi Arabia to secure an agreement with the monarchy that Saudi and all OPEC oil will only be traded in US dollars, not Japanese Yen or German Marks or any other. Bennett then went to take a high job at Exxon. The Saudis got major military guarantees and equipment in return and from that point, despite major efforts of oil importing countries, oil to this day is sold on world markets in dollars and the price is set by Wall Street via control of the derivatives or futures exchanges such as Intercontinental Exchange or ICE in London, the NYMEX commodity exchange in New York, or the Dubai Mercantile Exchange which sets the benchmark for Arab crude prices. All are owned by a tight-knit group of Wall Street banks–Goldman Sachs, JP MorganChase, Citigroup and others. At the time Secretary of State Henry Kissinger reportedly stated, “If you control the oil, you control entire nations.” Oil has been at the heart of the Dollar System since 1945.

Russian benchmark importance

Today, prices for Russian oil exports are set according to the Brent price in as traded London and New York. With the launch of Russia’s benchmark trading, that is due to change, likely very dramatically. The new contract for Russian crude in rubles, not dollars, will trade on the St. Petersburg International Mercantile Exchange (SPIMEX).

The Brent benchmark contract are used presently to price not only Russian crude oil. It’s used to set the price for over two-thirds of all internationally traded oil. The problem is that the North Sea production of the Brent blend is declining to the point today only 1 million barrels Brent blend production sets the price for 67% of all international oil traded. The Russian ruble contract could make a major dent in the demand for oil dollars once it is accepted.

Russia is the world’s largest oil producer, so creation of a Russian oil benchmark independent from the dollar is significant, to put it mildly. In 2013 Russia produced 10.5 million barrels per day, slightly more than Saudi Arabia. Because natural gas is mainly used in Russia, fully 75% of their oil can be exported. Europe is by far Russia’s main oil customer, buying 3.5 million barrels a day or 80% of total Russian oil exports. The Urals Blend, a mixture of Russian oil varieties, is Russia’s main exported oil grade. The main European customers are Germany, the Netherlands and Poland. To put Russia’s benchmark move into perspective, the other large suppliers of crude oil to Europe – Saudi Arabia (890,000 bpd), Nigeria (810,000 bpd), Kazakhstan (580,000 bpd) and Libya (560,000 bpd) – lag far behind Russia. As well, domestic production of crude oil in Europe is declining quickly. Oil output from Europe fell just below 3 Mb/d in 2013, following steady declines in the North Sea which is the basis of the Brent benchmark.

End to dollar hegemony good for US

The Russian move to price in rubles its large oil exports to world markets, especially Western Europe, and increasingly to China and Asia via the ESPO pipeline and other routes, on the new Russian oil benchmark in the St. Petersburg International Mercantile Exchange is by no means the only move to lessen dependence of countries on the dollar for oil. Sometime early next year China, the world’s second-largest oil importer, plans to launch its own oil benchmark contract. Like the Russian, China’s benchmark will be denominated not in dollars but in Chinese Yuan. It will be traded on the Shanghai International Energy Exchange.

Step-by-step, Russia, China and other emerging economies are taking measures to lessen their dependency on the US dollar, to “de-dollarize.” Oil is the world’s largest traded commodity and it is almost entirely priced in dollars. Were that to end, the ability of the US military industrial complex to wage wars without end would be in deep trouble.

Perhaps that would open some doors to more peaceful ideas such as spending US taxpayer dollars on rebuilding the horrendous deterioration of basic USA economic infrastructure. The American Society of Civil Engineers in 2013 estimated $3.6 trillion of basic infrastructure investment is needed in the United States over the next five years. They report that one out of every 9 bridges in America, more than 70,000 across the country, are deficient. Almost one-third of the major roads in the US are in poor condition. Only 2 of 14 major ports on the eastern seaboard will be able to accommodate the super-sized cargo ships that will soon be coming through the newly expanded Panama Canal. There are more than 14,000 miles of high-speed rail operating around the world, but none in the United States.

That kind of basic infrastructure spending would be a far more economically beneficial source of real jobs and real tax revenue for the United States than more of John McCain’s endless wars. Investment in infrastructure, as I have noted in previous articles, has a multiplier effect in creating new markets. Infrastructure creates economic efficiencies and tax revenues of some 11 to 1 for every one dollar invested as the economy becomes more efficient.

A dramatic decline for the role of the dollar as world reserve currency, if coupled with a Russia-styled domestic refocus on rebuilding America’s domestic economy, rather than out-sourcing everything, could go a major way to rebalance a world gone mad with war. Paradoxically, the de-dollarization, by denying Washington the ability to finance future wars by the investment in US Treasury debt from Chinese, Russian and other foreign bond buyers, could be a valuable contribution to genuine world peace. Wouldn’t that be nice for a change?


silverngold @ 21:41 Why not! After all the RCMP are known for their sexual assaults of female members

Posted by Auandag @ 22:39 on January 12, 2016  

and for tazering innocent people to death and illegal gun confiscation. As far as I am concerned they can disband the whole bunch!

WTF is happening to Canada????????? This is BLOODY RIDICULOUS and disturbing!!!

Posted by silverngold @ 21:41 on January 12, 2016  

Anybody going to watch the state of the Union in a few minutes.

Posted by goldielocks @ 20:51 on January 12, 2016  

Looks like a snake pit gathering. Too bad it’s not a boat. No comment why.

The Proof Is In: The US Government Is The Most Complete Criminal Organization In Human History

Posted by silverngold @ 18:50 on January 12, 2016  

Don’t pass this one by. It exposes how the POS government is dictating what the rest of the world will do, and you, the innocent citizen, must stand tall and defend your Constitution or suffer the consequences.


The Secretary of State’s

Posted by commish @ 18:35 on January 12, 2016  

a674b406 daughter Vanessa Kerry is married to an Iranian.

The boats in question

Posted by ipso facto @ 18:25 on January 12, 2016  


A little more here


Rubicon to delist from the NYSE

Posted by ipso facto @ 18:24 on January 12, 2016  

January 12, 2016

Rubicon Minerals Corporation Announces the NYSE MKT Notification of Suspension and Intent to Commence Delisting Proceedings

TORONTO, ONTARIO–(Marketwired – Jan. 12, 2016) – Rubicon Minerals Corporation (TSX:RMX)(NYSE MKT:RBY) (“Rubicon” or the “Company”) received notice, dated January 11, 2016, that the staff of NYSE Regulation, Inc. (“NYSE Regulation”) has determined to suspend trading immediately and commence proceedings to delist the Company’s common stock from NYSE MKT LLC (“NYSE MKT” or the “Exchange”). The Exchange notified the Company that it no longer complied with the continued listing standards as set forth in Section 1003 of the NYSE MKT Company Guide due to the low selling price of the Company’s common stock. Therefore, the Company’s securities are subject to being delisted from the Exchange.

NYSE MKT has informed the Company that the NYSE MKT will apply to the U.S. Securities and Exchange Commission (the “SEC”) to delist the Company’s common stock upon completion of all applicable procedures, including any appeal by Rubicon of the NYSE Regulation staff’s decision.

Rubicon’s common shares will continue to be listed on the Toronto Stock Exchange (“TSX”), one of the world’s premier stock exchanges for mining and exploration companies. U.S. shareholders will be able to trade their Rubicon shares on the TSX through U.S. broker-dealers who have Canadian registered broker-dealer affiliates. In addition, management expects that the Company’s common shares will continue to be quoted on the U.S. over-the-counter (“OTC”) markets following the delisting on the OTC Pink® under the ticker symbol “RBYCF”, which is operated by OTC Markets Group. There is no assurance that an active market in the common shares will develop on OTC Pink®.

The Company will continue to file reports with Canadian securities regulators and with the SEC under applicable federal securities laws.


Michael Winship, Interim President and Chief Executive Officer

I know what I would do !

Posted by Ororeef @ 18:20 on January 12, 2016  

They would hear from me the day I took office ….

a week before pootie would know to get his people out of Iran ……..

I would inquire about his stockpile of Potassium Iodide to insure his good health….

That should get the message across.

Rubicon Minerals’ F2 deposit is uneconomic

Posted by ipso facto @ 17:29 on January 12, 2016  


Another Hostage crisis ? deja vu all over again ?

Posted by Ororeef @ 17:23 on January 12, 2016  


another Jimmy Carter type crisis

The Donald knows what to do !

Someone I know just posted this

Posted by goldielocks @ 17:15 on January 12, 2016  

10 of our Navy sailors taken prisoner by Iran, their boats seized. A test, a direct act of aggression or a grab for hostages to trade for something?
Any reasons are an insult to our country.
Beware my repeated warnings…..our enemies know when the election is too and will not fail to seize the opportunity Obama gives them.
More will come.
Meanwhile, pray for the safety of our sailors and strength for their families.

Maddog @ 16:58

Posted by ipso facto @ 17:09 on January 12, 2016  

LOL! Someone explodes a suitcase nuke and gold’ll pop $10 before dropping $20.


Posted by goldielocks @ 17:07 on January 12, 2016  

I think in the beginning it’s going to be choppy, who knows maybe through till the next high. Maybe that’s just hopeful thinking but yea I bet they see it now and will try to stop it. This could go on for awhile maybe but can’t go on forever. Pretty soon at some point the Bulls are gonna push back.

ipso facto

Posted by Maddog @ 16:58 on January 12, 2016  

re Iranians etc and gold gets hit for 3 bucks !!!!!!!

They never stop.


Posted by goldielocks @ 16:57 on January 12, 2016  

I was getting up to three email a day between Hillary, Chelsea and Bill asking for money. They had this thing,  just a dollar it adds up. Someone a x tea party now patriot said maybe someone played a joke on me and donated in my name. It finally stopped so far with a end of the year push. Some were quite demanding, saying you have contributed zero in big 0 letters. Yep as far as shes concerned that’s my middle name zero. Now she’s playing on women rights. Hum now how do you mix that with muslim rights and those caught under Shaira I remember back in the 90 s a older woman pt in her 80s showed me a lost of people they were affiliated with that died suspiciously. One was a seven month pregnant woman who was shot in back of the head. They put her cause of death suicide. Dont know if all true or not but that was before Monica appeared and going public may have saved her from the same fait. Guess they’re okay with women slaves they call interns. In turn what lol


Two U.S. Navy boats with 10 sailors on board taken into Iranian custody

Posted by ipso facto @ 16:54 on January 12, 2016  

The Pentagon lost contact with the boats in the Persian Gulf
They were moving between Kuwait and Bahrain when the US lost contact
Officials have since been assured the boats and crew will be returned
Secretary of State John Kerry has been in touch with Iranian officials

Read more: http://www.dailymail.co.uk/news/article-3396419/US-Navy-boats-taken-Iranian-custody-Persian-Gulf.html#ixzz3x4NM1wGM

Maddog @ 14:57

Posted by ipso facto @ 16:47 on January 12, 2016  

“size of Trump’s Rallys”

Yeah that’s gotta mean something. No gray man like the others.

Re: the market. At least we came back some and cut the loss.

Maddog @ 15:55 NEM

Posted by Ororeef @ 16:16 on January 12, 2016  

the Low of $15.75 suggests a future High of $70 for NEM    ..the lower it goes now ..the higher the future price

At current Gold prices for NEWMONT a FAIR price is $33.00   .even at the current gold suppressed price !

When I say monster offers

Posted by Maddog @ 16:12 on January 12, 2016  

on my screen most of the time the bid offers are 30 by 30 ie. in the 10’s…sometimes they go into the 100’s…..when NEM went 17.02 bid the offer was 1750 !!!!!.

That was all taken, so some serious buying today and only Kamikaze sellers @ the close in all shares especially GDX stopped an even better close.

Absent the Rig we would have a roaring bull mkt.


Posted by goldielocks @ 16:11 on January 12, 2016  

Re This is exactly what Trump proposes for cars made in Mexico a 30 % TAX to prevent the loss of jobs …We never saw the supposed benefit of CHEAPER prices for cars as they promised us for allowing them entry. where the Fairness ? TRUMP nailed it exactly….

exactly!!thats just more bull the white collared criminals come up with to legitimize outsourcing for profit. Even if it is lower for a while in which this case it wasn’t it sneaks up and by then it’s too late and they know it.

Yep Im well aware of what they’re doing or part of it anyways and it’s a plain brain dead idea. Like you experienced hiring a muslim baker quite funny and he was a hirable one. Not to mention the possible terrorist schemes that can come with it. Cars falling apart, planes falling from the sky’s while they strip search your wives and daughters at the air port. What a joke.


Posted by Ororeef @ 16:00 on January 12, 2016  

this is because Government leaders are corrupt .They have opted for CHEAP LABOR for Industry against the citizens interests….  We have the same problem……resulting in falling wages …its NO surprise wages wont go up  !   Its a RACE to the bottom…..Industry demands cheaper labor because of competition resulting in falling wages …World wide labor rates set by the lowest cost country is NUTS …..The rates need to be comparable to major trading partners between equals or near equals with TAXes  on extreme low wages producers to equalize and prevent  the loss of jobs .


This is exactly what Trump proposes for cars made in Mexico a 30 % TAX to prevent the loss of jobs …We never saw the supposed benefit of CHEAPER prices for cars as they promised us for allowing them entry.   where the Fairness ?   TRUMP nailed it exactly….

Monster offer of Nem @ 1703 taken out !!!!!!

Posted by Maddog @ 15:55 on January 12, 2016  

Trying to stop the General ( NEM) from going positive

Posted by Maddog @ 15:47 on January 12, 2016  

Next run for Gold

Posted by Ororeef @ 15:35 on January 12, 2016  

GG future high is 87.16should bring a high minimum of $52-$87.15 for GG  if my charts are correct ,but a higher Gold price changes everything thats the nature of Ratios

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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.