All Russia’s Big Exports Could Soon Be in Roubles, Kremlin Signals

Russian President Vladimir Putin meets with State Duma Speaker Vyacheslav Volodin, at the Novo-Ogaryovo state residence outside Moscow, Russia October 26, 2020. (Kremlin via Reuters)
Russian President Vladimir Putin meets with State Duma Speaker Vyacheslav Volodin, at the Novo-Ogaryovo state residence outside Moscow, Russia October 26, 2020. (Kremlin via Reuters)
TT

All Russia’s Big Exports Could Soon Be in Roubles, Kremlin Signals

Russian President Vladimir Putin meets with State Duma Speaker Vyacheslav Volodin, at the Novo-Ogaryovo state residence outside Moscow, Russia October 26, 2020. (Kremlin via Reuters)
Russian President Vladimir Putin meets with State Duma Speaker Vyacheslav Volodin, at the Novo-Ogaryovo state residence outside Moscow, Russia October 26, 2020. (Kremlin via Reuters)

The Kremlin indicated on Wednesday that all of Russia's energy and commodity exports could be priced in roubles, toughening President Vladimir Putin's attempt to make the West feel the pain of the sanctions it imposed for the invasion of Ukraine.

With Russia's economy facing its gravest crisis since the 1991 collapse of the Soviet Union, Putin on March 23 hit back at the West, ordering that Russian gas exports should be paid for in roubles.

That move forced Germany, Europe's biggest economy, to declare on Wednesday an "early warning" that it could be heading for a supply emergency. Germany imported 55% of its gas from Russia last year.

In the strongest signal yet that Russia could be preparing an even tougher response to the West's sanctions, Russia's top lawmaker suggested on Wednesday that almost Russia's entire energy and commodity exports could soon be priced in roubles.

Asked about the comments by parliament speaker Vyacheslav Volodin, Kremlin spokesman Dmitry Peskov said: "This is an idea that should definitely be worked on."

"It may well be worked out," Peskov said of the proposal.

Peskov said that the US dollar's role as a global reserve currency had already taken a hit, and that a move to pricing Russia's biggest exports in roubles would be "in our interests and the interests of our partners."

Europe, which imports about 40% of its gas from Russia and pays mostly in euros, says Russia's state-controlled gas giant Gazprom is not entitled to redraw contracts.

"If you want gas, find roubles," Volodin said in a post on Telegram. "Moreover, it would be right - where it is beneficial for our country - to widen the list of export products priced in roubles to include: fertilizer, grain, food oil, oil, coal, metals, timber etc."

Rouble gamble

Russia exports several hundred billion dollars worth of natural gas to Europe each year. Euros account for 58% of Gazprom exports, US dollars 39% and sterling around 3%, according to the company.

Peskov said Russia will give buyers time to switch to roubles.

Still, the exact way in which payments could be made remained unclear as of Wednesday. Russia is trying to both bolster the rouble and, in the longer run, chip away at the dominance of the dollar in pricing global energy and commodities.

To have any hope of achieving that, Russia would need help from China, the world's second-largest economy.

"China is willing to work with Russia to take China-Russian ties to a higher level in a new era under the guidance of the consensus reached by the heads of state," Chinese Foreign Minister Wang Yi said.

Russian Foreign Minister Sergei Lavrov says that Russia's relations with China are at their strongest level ever.

Sanctions 'boomerang'

Russian officials have repeatedly said the West's attempt to isolate one of the world's biggest producers of natural resources is an irrational act of self harm that will lead to soaring prices for consumers and tip Europe and the United States into recession.

Russia says the sanctions - and in particular the freezing of about $300 billion in Russian central bank reserves - amount to a declaration of economic war.

Former President Dmitry Medvedev said the sanctions had "boomeranged" back to undermine European and North America economies, driving up prices for fuel and heating and eroding confidence in the dollar and euro.

"The world is waking up: confidence in reserve currencies is melting like a morning fog," Medvedev said. "Abandoning the dollar and the euro as the world's main reserves no longer looks like a fantasy."

Medvedev said "crazy politicians" in the West had sacrificed the interests of their taxpayers on the altar of an unknown victory in Ukraine. "The era of regional currencies is coming."

Russia has long sought to reduce dependence on the US currency, though its main exports - oil, gas and metals - are priced in dollars on global markets.

Globally, the dollar is by far the most traded currency, followed by the euro, yen and British pound.



Oman’s Dhahirah: A Strategic Gateway Strengthening Trade with Saudi Arabia

Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)
Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)
TT

Oman’s Dhahirah: A Strategic Gateway Strengthening Trade with Saudi Arabia

Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)
Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)

In the heart of Dhahirah Governorate in northwestern Oman, a key economic zone is emerging—not just as a border crossing but as a vital trade and logistics hub linking Oman and Saudi Arabia.

The border crossing in the Empty Quarter, located about 170 kilometers from Ibri, plays a crucial role in facilitating commercial convoys and enhancing logistical integration between the two countries.

Recognizing the strategic significance of this route, Oman has developed an integrated economic zone in Dhahirah, spanning 388 square kilometers and situated just 20 kilometers from the border. This joint Omani-Saudi project aims to capitalize on the region’s geographic and commercial advantages, driving economic growth and attracting investment.

The initiative aligns with Saudi Vision 2030 and Oman Vision 2040, both of which prioritize economic diversification and regional cooperation. The project is expected to foster sustainable growth, create job opportunities, and position the area as a major economic hub in the Gulf.

The Dhahirah Economic Zone will offer diverse investment opportunities to support cross-border trade, including business complexes and industrial zones specializing in agriculture, livestock, and mining. It will also feature a 4-square-kilometer dry port, a logistics hub, warehouses, and import-export companies.

Speaking to Asharq Al-Awsat, Ibri Governor Dr. Saeed Al-Harthi emphasized the strategic importance of the Saudi-Omani border crossing, highlighting that the new economic zone will be a major catalyst for development. He noted that trade between the two nations has surged by approximately 360% between 2022 and 2024.

The first phase of infrastructure development for the zone is estimated to cost around 120 million Omani rials ($312 million), with strong backing from both governments to ensure the project’s success.

Additionally, Dhahirah has seen the launch of the Ibri Solar Power Plant, Oman’s largest, with an investment of $403 million. Covering 13 million square meters, the plant has a production capacity of 500 megawatts. According to Al-Harthi, the first phase has been completed, with the second phase underway, contributing to Oman’s goal of achieving net-zero emissions by 2050.

The industrial city within the zone is also a key component of Oman’s strategy to support private sector growth and small-to-medium enterprises (SMEs), with an estimated contribution of $3.9 million to SME development.

Strategically positioned near the Empty Quarter border crossing, the industrial city is set to become a hub for manufacturing and logistics, strengthening economic ties between Oman and Saudi Arabia.

Commenting on the project’s progress, Majid Al-Muqrashi, Director of Financial and Administrative Affairs at Ibri Industrial City, told Asharq Al-Awsat that since the first phase’s inauguration in 2024—spanning 3 million square meters at a cost of $23.4 million—the city has seen significant growth.

He revealed that 15 contracts have been signed with investors across various sectors, with 191,000 square meters already leased. While some projects remain under construction, additional contracts are in the finalization stage, further cementing Dhahirah’s role as a key economic hub in the region.