Tensions between Russia and Western countries are reaching new heights. Vladimir Putin relaunches the economic offensive. His goal ? Convince oil-exporting countries to abandon the US dollar.
A hard blow against the “petrodollar”
Putin doesn’t beat around the bush. “If the Middle East stops using the dollar for oil, it will be the end of the dollar,” he warned. A declaration with serious consequences. The Kremlin wants to strike at the heart of the supremacy of the “petrodollar”. This system makes the dollar the queen currency for energy exchanges. Moscow thus intends to counter heavy Western economic sanctions.
The Russian bet is simple. Dissolving the dollar’s role in oil trade would weaken America’s ability to impose sanctions. The Kremlin aims to reduce this leverage of Washington’s power.
By calling on key oil-producing countries to turn away from the “petrodollar”, a system in which the dollar is used for international energy transactions, Putin aims to deal a severe blow to the greenback’s global reserve currency status. This system has long supported global demand for dollars and strengthened American economic influence.
The Kremlin appears to be betting that an erosion of the dollar’s role in energy trade would significantly reduce Washington’s ability to impose economic sanctions in the future. Such a scenario would weaken the leverage of power of the United States on the international scene.
An arduous challenge with destabilizing consequences for the economy
Putin’s call is not to be taken lightly. But convincing big exporters to abandon the dollar will be very difficult. Many Gulf countries have strong economic and political ties with the United States. A turnaround seems unlikely in the short term.
However, some experts are sounding the alarm. If the United States sticks to its positions, producers could well study credible alternatives to the dollar. A scenario with immense repercussions. Financial markets would be destabilized. So does the American economy.
The gradual marginalization of the greenback in global energy transactions would weaken the dollar’s global reserve currency status and deal a severe blow to the United States’ overall economic influence. Washington will have to carefully juggle preserving its hegemony while managing growing geopolitical tensions.
Putin’s offensive against the “petrodollar” illustrates the escalation of tensions with the United States. A total abandonment seems unlikely today. But the consequences of an erosion of the dollar in energy would be destabilizing. The economic war rages. The battle for monetary influence could become one of the new fronts of the geopolitical confrontation.
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