Russian Deputy Prime Minister Alexander Novak said Thursday the oil- and gas-rich country could be tempted to break away from dollar-denominated crude oil deals soon if President Joe Biden’s administration continues to impose targeted economic sanctions.
“Well, ideally, we would prefer not to deviate from the dollar as it is an international currency used for billing,” Novak told CNBC’s Hadley Gamble at the St. Petersburg International Economic Forum, according to a translation.
“But if our American partners create such a situation, we have no choice but to do it gradually,” he added.
His comments come shortly after Russia announced that it would completely remove US dollar assets from its National Wealth Fund.
Russian Finance Minister Anton Siluanov said at the same event on Thursday that the changes can be expected within a month, according to Reuters. Russia’s NWF collects oil revenues and was originally geared towards supporting the country’s pension system.
The move comes ahead of a summit meeting between Russian President Vladimir Putin and US President Joe Biden later this month.
“Active player in the global energy scene”
“We will continue to be the world leader in the fossil fuel market and will diversify by entering the LNG and petrochemicals markets,” Novak said, referring to the acronym for liquefied natural gas.
“Plus new energy generation, develop clean energy,” he continued, naming hydrogen, carbon storage technologies and the development of new fuels, among other things.
Russia’s economy has been under international sanctions since 2014 after the annexation of Crimea.
His role in a pro-Russian uprising in eastern Ukraine, the US election interference in 2016, neurotoxin poisoning in the UK and his role in the SolarWinds cyberattack have all resulted in further sanctions. Russia, for its part, denies any involvement or wrongdoing.
International benchmark Brent Crude Oil futures traded at $ 71.56 a barrel on Thursday afternoon in London, up about 0.3%, while U.S. West Texas Intermediate Futures at $ 68.99 was up about 0.2% % higher.
The oil price has risen by more than 30% since the beginning of the year.
In October 2019, Russia’s largest oil company Rosneft set the euro as the default currency for all new crude oil exports to protect it from the effects of US sanctions.
– CNBC’s Holly Ellyatt contributed to this report.