Rosneft’s Sanctions Hedge Play
One of the key underpinnings of US global economic power is the use of the US dollar for global trade transactions, but sanctions make that a far less attractive setup for other powers. It is no coincidence then that we are starting to see a de-dollarization drive from a variety of players. After much talk about Russia switching to the Euro, Russian oil giant Rosneft is taking the first concrete step toward this reality: Traders have told Reuters that Rosneft has informed them that future tender contracts for oil products will be in euros, not dollars - as soon as Q4 of this year. It’s a hedge against future US sanctions, and a hedge against, well, hegemony. For now, consider this more significant in terms of a hedge against sanctions rather than the dollar’s hegemony. In reality, the dollar will be very difficult to dethrone.
The Gulf Anti-Iran Alliance Is Cracking
The back channels between the UAE and Saudi Arabia are many and deep, and while the Saudis might not have blinked at first when UAE-backed separatists seized Yemen’s southern port of Aden from the internationally recognized Hadi government, this was not done without some sort of back-channel discussion. The UAE wants out of the Yemen conflict, which is costing it, on a monthly basis, billions of dollars. The biggest question for investors right now is whether these Gulf relations are even sustainable, or whether we’re about to see a…