Russia, an ivory tower of young narcisist leaders who disregard the world around

Oil & gas—The ruble should become the currency for oil and gas trading

News The ruble should become the main currency for oil and gas contracts,
President Medvedev said yesterday in his address to the Federation Council.
Comment There is little that Russia can do unilaterally to establish ruble
denominated oil trading. Russian oil trades on the basis of dollar denominated
dated Brent prices. If Russian oil companies ask their off-takers to pay in rubles,
the impact would be limited to their counterparts at the MICEX’s ruble
exchange operations. The real impact might have place if Russia attempts to
establish independent exchange trading of ruble contracts for its Ural blend.
While this development is possible in theory, technically, it would take a long
time to establish a reliable ruble-denominated trading benchmark. In the case of
gas, the situation is even more complicated, as Gazprom would apparently have
to renegotiate all of its long-term contracts, which would not be an easy task in
an environment of mounting pressure to substitute long-term contracts for spot
trading.