from Zero Hedge:
Two days after the WSJ confirmed Maduro's earlier threat that he would stop accepting US Dollars as payment for crude oil imports, Venezuela has done just that.
As a reminder, and as we reported previously, in an effort to circumvent U.S. sanctions, Venezuela told oil traders that it will no longer receive or send payments in dollars. As a result, oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.
Furthermore, Venezuela's state oil company Petróleos de Venezuela SA, or PdVSA (whose bankruptcy is fast approaching), told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner. The new payment policy hasn’t been publicly announced, but Vice President Tareck El Aissami, who has been blacklisted by the U.S., said Friday, "To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar."
Fast forward to today, when according to a statement on the Venezuela oil ministry, the country's weekly crude oil and petroleum basket "will be published in Chinese Yuan" - oddly, not in Euros as the WSJ hinted - going forward. We can only assume that Venezuela avoided the European currency on concerns that Brussels may follow in D.C.'s footsteps and impose financial sanctions on the Maduro regime next. Which meant that the only "safe" currency to transact in, was that of the country's two big sources of vendor (and commodity) financing: China and Russia. For now Venezuela has picked the former.
The ministry also unveiled a price of 306.26 Yuan per barrel for the week of Sept. 11-15, up 1.8% from the 300.91 in the previous week, saying "the more favorable outlook on world oil demand and reports of lower global production contributed to the strengthening of crude oil prices this week."
As for the more relevant topic, Venezuela's abdication of the US dollar, whether permanent or temporary - until the US finds a way to intervene and restore normalcy - Nomura debt analyst Siobhan Morden warned that "you can say whatever you want for your domestic propaganda and make it look like you’re retaliating against the U.S.... this political posturing will only be to their detriment.”
It remains to be seen if president Trump will use today's official switch by Venezuela to a PetroYuan as justification for a more "aggressive" foreign policy posture.
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Meanwhile, recall that the decision by the nation with the world's largest proven oil reserves to eliminate the dollar, comes just days after China and Russia unveiled the latest Oil/Yuan/Gold triad at the latest BRICS conference.
“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”
“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar. Clearly, Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.
This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan. Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.
The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.
To promote their strategic partnership, Russia and China– via the Russian Central Bank and the People’s Bank of China – have been developing ruble-yuan swaps for quite a while now. Once that moves beyond the BRICS to aspiring “BRICS Plus” members and then all across the Global South, Washington’s reaction is bound to be nuclear (hopefully, not literally).
Washington’s strategic doctrine rules RC should not be allowed by any means to be preponderant along the Eurasian landmass. Yet what the BRICS have in store geo-economically does not concern only Eurasia – but the whole Global South.
Sections of the War Party in Washington bent on instrumentalizingIndia against China – or against RC – may be in for a rude awakening.