by Kenneth Schortgen, The Daily Economist:

In 2013 an oil and natural gas agreement between Russia and China would eventually grow into a complete energy program that led to a cracking of the 45 year old petrodollar system. And through the ability of nations to purchase energy using either Yuan or Rubles, reliance upon the dollar began its final decline.

And ironically, it was about this time that the United States began a new policy of bypassing the United Nations to instead simply administer economic sanctions unilaterally on anyone they believed somehow threatened dollar hegemony. And this rogue use of economic warfare has isolated Washington even more… even to the point of OPEC nations potentially leaving Western influence to join with Russia’s Eurasian Economic Union.

And on May 25, one of these oil producers finalized an agreement with Russia that ensures future protections against U.S. imposed sanctions, and shows the rest of the world how they too can avoid being bound by the dying petrodollar noose.

Moscow and Tehran have signed a deal, under which Iran will sell crude to Russia in exchange for products, according to Iranian Oil Minister Bijan Zanganeh.

While sanctions against Iran have been lifted, banking restrictions on trade in US dollars remain, making it difficult to sell oil on the open market.

“The deal has been concluded. We are just waiting for the implementation from the Russian side. We have no difficulties; we signed the contract, everything is coordinated between the parties. We are waiting for Russian oil companies to send tankers,” he said, as quoted by Russian news agencies RIA and TASS.

The agreement was initially reached in 2014 when Iran was under Western sanctions over its nuclear program.

When the sanctions against Tehran were lifted in 2016, Russian Energy Minister Aleksandr Novak said the deal was no longer necessary.

However, in March 2017, Novak said it was back on the table with Russia buying 100,000 barrels per day from Iran and selling the country $45 billion worth of goods.

Despite the lifting of sanctions, Tehran is still facing problems in re-connecting Iranian banks with global financial markets.

A February report by the International Monetary Fund said that while Iran has been reconnected to SWIFT, significant challenges prevent Iranian banks fully-reconnecting to global banks still exist mostly due to remaining US sanctions.

“US primary sanctions apply to US financial institutions and companies, including their non-US branches (but not their subsidiaries). Moreover, with very limited exceptions, businesses and individuals related to the US continue to be generally prohibited from dealing with Iran, including with the government,” the IMF said.

“US dollar clearing restrictions have not been lifted and pose a significant challenge for non-US banks who may do business with Iran, but may not be paid in US dollars,” it added. – Russia Today

As both Russia and China continue to create and institute infrastructures that allow nations to function in all financial capacities outside of SWIFT and the Western financial system, the sooner the petrodollar can be completely buried in the ground. And as well, it will mean the sooner that U.S. dominion over the economic affairs of nations can finally come to an end.

Read More @ TheDailyEconomist.com