Russian President Vladimir Putin has said that disengaging the American dollar from the Russian economy is one of his top goals, as he begins his fourth term in office this week, RBC reports.
Putin said that “the dollar monopoly is dangerous.” The announcement comes as Moscow and Beijing attempt to step up bilateral oil sales and financial cooperation.
In his address to Russian Parliament following his inauguration, Putin vowed to relieve Russia of the “dollar burden,” the “dangerous monopoly of the U.S. dollar in the pricing of oil in global commodities markets.” He indicated that the underlying reasons for the planned move were security-related.
“We used to behave naively, but now we see that the WTO [the World Trade organization] rules are all too often broken, the restrictions are imposed for political reasons, which they call sanctions. Plus more and more of them are imposed to secure its favorite competitive advantages,” Putin said.
According to him, de-dollarization should be promoted on principle, in order to preserve the country’s sovereignty. Putin didn’t name an alternative currency in his speech.
Putin’s recent announcement came less than two months after China launched yuan-denominated oil futures on the Shanghai International Energy Exchange, thus challenging the dominance of the Brent and West Texas Intermediate (WTI) benchmarks. Incidentally, in 2017 China emerged as the largest oil consumer, surpassing the United States. According to the U.S. Energy Information Administration (EIA), in 2017 China imported 8.4 million barrels of crude per day, half a million more than the United States.