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​Gazprom Neft CEO says ditch dollar, look east if sanctions escalate

Published time: April 07, 2014 10:01
Edited time: April 07, 2014 11:19
Alexander Dyukov.(Reuters / Anton Golubev)

Alexander Dyukov.(Reuters / Anton Golubev)

The oil arm of Gazprom says 95 percent of foreign partners are ready to do business in the euro. The company’s CEO said it could divert exports to Asian markets should the West intensify sanctions.

A study reveals the task in changing currencies is achievable assured Aleksander Dyukov, the Gazprom Neft chief executive.

"This shows that in principle there is nothing impossible - you can switch from dollar to euro and from euro, in principle, to rubles," as Vedomosti quotes Mr Dyukov.

The Gazprom Neft CEO said it’s important to also study the efficiency of the plan, its probability, and additional losses.

The CEO considers there is a low probability Western banks will reduce cooperation. No one wants geopolitical tension to affect their partnerships. However Gazprom Neft is ready to look to Asian lenders, and raise money in Russia.

"We think Western banks are unlikely to stop cooperating with us, but in any case we have paved a way to Asian lenders as well... plus there is a domestic market," Dyukov added.

There is an opinion that any restrictions by the US directed at halting dollar operations, in the long-term, may lead the United States to a default, Dyukov says.

"The US currency is already loosing positions…The usage of the dollar as an instrument of punishment may decrease its weight as the reserve currency…Taking into account its huge national debt, at some instant there will be a problem with its refinancing as dollar assets will become interesting to nobody," the top manager said.

In comments on other possible action by the West, Dyukov said that the US oil sale test on March 14 of 5 million barrels from its own strategic inventories could not shake the world oil market from equilibrium.

"Frankly speaking, I don't know, what they were guided by. But that was made, in my opinion, as shot by shot to the elephant. The oil market, certainly, can be altered, but for that to happen it needs bigger volumes," said Dyukov.

According to his calculations the minimal amount of oil to be sold in order to affect the world market should be around 3 million barrels a day long-term.

The head of Gazprom Neft supposes that none of the global oil manufacturers is interested in lowering the price. In particular, in the US where the cost of production of hardly extractable oil is high and any reduction in cost of raw materials will cut a projects’ profitability.

The world oil price remains robust as the May 14 futures of the WTI crude stand at $100.60, while Brent is selling at $105.63

Comments (42)


Tsar Cube 23.04.2014 04:43

G.W.B. 22.04.2014 23:49

I disagree with that! Having a UNIVERSAL WORLD CURRENCY - before the Dollar was used as a weapon - was a nice & good thing for our entire Planet!


That's the reason why it's not good, someone will always try to use it as a weapon and the world will switch to new methods like is happening now. Also, the USD as a world reserve currency has ALWAYS been used as a weapon, you just didn't notice it before. I'm just glad US economy will crash before 2020 and the country will cease to exist as it does now. A better world order is ahead of us.


Emmett 13.04.2014 19:06

rogirl 08.04.2014 04:05

The US dollar can no longer be used to blackmail or bully countries into submission, and no company in their right mind will continue to swap their gold,oil, or other resources for useless bits of quantative easing paper. The US and its currency is on its way down and everyone knows it.


I agree with what you said except I would say intelligent people know the US and its currency are on the way down. There are still uninformed people who are not aware the world is changing and when it does the US will be at or near the bottom.

US dollar = toilet paper.


Regula 11.04.2014 10:56

The US will do well not to upset the oil market, because if Russia decides to move away from the dollar, the US may default - that means the entire world economy will crash - way worse than the depression or the current great recession. This entire gimmickry of trying to undermine Russia and China is just not realistic. It is one more of these hawks wet dreams, but forgetting that the US economy will also be collateral damage to this desire of US exceptionalism.

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