India-Russia Oil Deals Chip Away at Dollar Dominance in International Trade – Economics Bitcoin News

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For several decades now, the US dollar has been the dominant currency in international trade, with most countries using it as the default currency for their transactions. However, recent developments in the oil trade between India and Russia may be the beginning of the end for the dollar’s reign as the world’s primary reserve currency.

In recent years, India and Russia have been developing closer ties, fueled in part by their mutual desire to reduce their dependence on the US dollar. One of the most significant developments in this relationship has been the growing oil trade between the two countries.

India is one of the world’s largest oil importers, and until recently, it relied primarily on Middle Eastern countries like Saudi Arabia and the UAE to meet its energy needs. However, in 2018, India began importing crude oil from Russia, and the two countries have since doubled their trade volume.

The key factor that makes this trade arrangement significant is that it is being conducted in national currencies rather than the US dollar. Traditionally, oil transactions have been denominated in dollars, which has given the US an enormous advantage in the global oil trade. However, by using their own currencies, India and Russia are chipping away at the dollar’s dominance and paving the way for other countries to follow suit.

There are many benefits for both India and Russia in conducting their oil trade in national currencies. For India, it helps to reduce its exposure to fluctuations in the US dollar, which can have a significant impact on the country’s economy. Additionally, by trading with Russia, India also gets access to a more diversified range of energy suppliers, which helps to ensure its long-term energy security.

For Russia, trading in national currencies has several benefits as well. By avoiding the US dollar, Russia can avoid the risk of US sanctions, which have been a thorn in its side for many years. Additionally, trading in rubles helps to shore up the Russian currency, which has been under pressure due to geopolitical tensions and economic sanctions.

While the India-Russia oil trade is still relatively small compared to the global oil trade, it is a significant step towards reducing the dominance of the US dollar. As other countries look to diversify their energy suppliers and reduce their dependence on the dollar, we can expect to see more trade agreements being conducted in national currencies.

Of course, this trend is not without risks. The US is likely to push back against any efforts to weaken the dollar’s position, and there could be economic and political consequences for countries that seek to move away from the dollar.

However, the benefits of reducing dependence on the dollar are too important to ignore. As more countries look for ways to reduce their exposure to the US currency, we can expect to see more deals like the India-Russia oil trade, which could eventually lead to a significant shift in the global balance of power.

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