Post
Topic
Board Politics & Society
Re: Russian Invasion of Ukraine[In Progress]
by
paxmao
on 30/03/2022, 20:55:29 UTC
Russia is now walking back their statements on demanding rubles for oil exports to countries they deem "unfriendly."

https://www.reuters.com/business/energy/russia-will-not-demand-immediate-switch-gas-payments-roubles-kremlin-2022-03-30/

Appears they understand they cannot further restrict their economy when it's already on the decline. IMO Russia understands the war is a lost cause and they have no way to circumvent the sanctions, so they have to play the game that the West wants them to play. Using China and India as trading partners can only support Russia's economy to a certain extent. Being isolated from the West has ramifications. There were also some reports that Putin's military generals are downplaying the status of the war and the severity of Russian troop losses because they don't want to be the bearer of bad news. Putin is losing control of his economy and his military.

It seems that, on the pissing contest, Germany's got a bigger one this time. Changing unilaterally a contract would send a message difficult to recall to the markets, which in the end are based on reputation (as I said in a few posts).

However there is a chance that Russia may actually implement this on future contracts. One of the reasons why the USD can print money with such generosity is that it is backed by crude, since most contracts around the world request a payment in USD. If Russia decides to change that on their oil and gas contracts, which may be a distinct possibility in the future, it may reinforce the rouble and make it more stable.