The Biggest Threat to Dollar Dominance (Source oilprice.com) Russian oil exporters are pressuring Western commodity traders to pay for Russian crude in euros and not dollars as Washington prepares more sanctions for the 2014 annexation of Crimea by Moscow, Reuters reported last week, citing as many as seven industry sources.

While it may have come as a surprise to the traders, who, Reuters said, were not too happy about it, the Russian companies’ move was to be expected as the Trump administration pursues a foreign policy where sanctions feature prominently. This approach, however, could undermine the dominance of the U.S. dollar as the global oil trade currency.

Early indications of this undermining became evident this spring, when Russia and Iran launched an oil-for-goods exchange program seeking to eliminate bilateral payments in U.S. dollars and plan to keep it going for five years. The sanction buddies discussed this sort of agreement earlier, back in 2014, when Iran was still under Western sanctions. Even after the notorious nuclear deal was reached, the two countries decided to go ahead with their barter deal, and the preliminary agreement was reached last year. According to it, Russia would receive 100,000 bpd of Iranian crude in exchange for US$45 billion worth of Russian goods.

In March, Iran banned purchase orders denominated in U.S. dollars and said that any merchant using dollars in their orders will not be allowed to conduct the import trade. A month later, Tehran announced that it will publish all its official financial reports in euros instead of dollars in a bid to encourage a switch to euros from dollars among state agencies and businesses.

 

Merkel joins Macron in call for ‘real, true’ European army after Trump slams idea (Source rt.com)

German Chancellor Angela Merkel has called for a “real, true” European army to be created, just days after French President Emmanuel Macron did the same – and received backlash from Donald Trump for doing so.

“We should work on a vision of one day establishing a real European army,” Merkel said during an address to MEPs at the European Parliament in Strasbourg.

That statement was an apparent nod of support to Macron, who last week said that Europe has to “protect ourselves with respect to China, Russia, and even the United States of America.” Europe cannot do so, he said, “unless we decide to have a true European army.”

Macron’s statement didn’t exactly sit well with US President Donald Trump, who lashed out at his French counterpart on Tuesday and noted that France’s problem during World War II wasn’t the US, Russia, or China – it was Germany.

“They were starting to learn German in Paris before the US came along,” he tweeted.