Report claims that Russia and Iran plan to establish a global gas cartel and that Moscow will launch its own precious metals exchange
Following Russian President Vladimir Putin’s statements at the end of June that members of the BRICS countries have formalized their plans to create a new “international reserve currency”, Russia is said to be laying the groundwork for a cartel gas market with Iran. Financial journalist and best-selling author Simon Watkins says “the alliance aims to control the two key elements of the global supply matrix as much as possible.” At the same time, Russia intends to create a precious metals exchange called Moscow World Standard (MWS).
US dollar and ruble remain robust, massive commodity price spike ‘harms European economy the most’
Last week, economists at Russia’s Economic Development Ministry noted that the country’s gross domestic product (GDP) decline would be much lower than previous estimates. Furthermore, Russian President Vladimir Putin once again criticized the United States and stressed that the United States needs “conflicts to maintain its hegemony”. Amid the war between Ukraine and Russia, the US dollar was strong and the Russian ruble was one of the best performing fiat currencies in the world.
The sanctions against Russia do not seem to affect the transcontinental country positioned in Eastern Europe, but rather everywhere else in Europe. For example, Forbes author Kenneth Rapoza explained in a report published on Tuesday that “European markets and energy security [has been] disrupted by Russian sanctions. The sanctions, Rapoza insisted, “triggered a massive spike in commodity prices that hurt Europe’s economy the most.” Europe is suffering from the worst inflation in years and reports detail that Russian oil always ends up filling European gas stations at an inflated price.
Journalist insists Russia and Iran are laying the groundwork for a global gas cartel
At the end of June, Putin explained that a new international reserve currency based on a basket of currencies was being considered by members of the BRICS countries. Following Putin’s statements, about two weeks later, Russia’s Gazprom and the National Iranian Oil Company (NIOC) signed a memorandum of understanding (MoU).
On the same day, Putin visited Tehran to discuss issues with Turkish and Iranian leaders. Oilprice.com financial reporter Simon Watkins believes the deal marks Russia and Iran laying the groundwork for a global gas cartel. The editorial further notes that global LNG supplier Qatar, the world’s largest liquefied natural gas company, may also join the partnership.
“With a foundation in the current Gulf Exporting Countries Forum (GECF), this ‘Gas OPEC’ would enable the coordination of an extraordinary proportion of the world’s gas reserves and the control of gas prices for years to come” , Watkins said Aug. 23. “Occupying the number one and number two positions respectively in the world’s largest table of gas reserves – Russia with just under 48 trillion cubic meters (tcm) and Iran with nearly 34 tcm – both countries are in an ideal position to achieve this,” added the author of oilprice.com.
Russia’s plans to launch Moscow World Precious Metals Exchange
Reports that show that the BRICS countries are considering a new international currency and that the recent partnership between Gazprom and NIOC follows on from Russia’s efforts to displace gold. According to capital.com, Russia intends to create its own precious metals exchange similar to the London Bullion Market Association (LBMA).
see the discussion of Russia creating a new Moscow World Standard (MWS) as an alternative to the London Bullion Market (LBMA) does indeed have ramifications…with a fixed price above the prevailing rate in London it could be an interesting matchup… h/t @capitalistexp
— David Cox, CMT, CFA (@DavidCoxWG) August 16, 2022
Capital.com contributor Indrabati Lahiri said Russia’s metal exchange idea was “tentatively called the Moscow World Standard (MWS)”. Additionally, top Russian gold producer Polyus issued Chinese yuan bonds and the company did so twice in 30 days. Reuters details that since the start of the war between Ukraine and Russia in February, “the demand for the yuan has increased”.
What do you think of the signing by Gazprom and NIOC of a memorandum of understanding and the opinion of Simon Watkins on the situation? What do you think of the Moscow World Standard’s precious metals trading idea? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Editorial photo credit: Grigory Sysoyev, Sputnik, AP
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