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OPEC run banks look towards Russia as control over global oil moves North


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Mar 28, 2010
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OPEC run banks look towards Russia as control over global oil moves North


OPEC Summit
Photo by Salah Malkawi/Getty Images

As the petrodollar continues to decline in use by oil producers over the past few years, a sea change is occurring where pricing and controls are slowly moving away from OPEC, and into the hands of Russia. And with this looking more and more like a future certainty, banks in the Middle East that were providing the capital to run OPEC's oil industry are now looking North, and setting their sights on opening offices and institutions in Eurasia where their new partnerships lie.

On March 12, the Kuwaiti Central Bank Deputy Governor Yousef J. Obaid announced that the oil producer would be very amenable to establishing a banking link to Russia if they were invited to do so in the future. In fact, this offer comes just after Russia announced four days ago of a joint summitthat they will be hosting with OPEC and non-OPEC oil producers sometime between March 20 and April 1 to see what can be done to help stabilize oil prices, and bring together consensus within the coalition of the world's oil states.

Kuwaiti banks would open their representative offices or subsidiaries in Russia if they receive such a proposal, Kuwaiti Central Bank Deputy Governor Yousef J. Obaid told Sputnik.

MOSCOW (Sputnik) — According to Obaid, there are currently 10 national commercial banks and a special bank successfully operating in Kuwait. The share of the Islamic banks accounts for 40 of the market, he added.

"We have no objections to the opening of a Kuwaiti bank in Russia, if there is such a proposal, and all the conditions coincide," the deputy head said. – Sputnik News

Just as China has been consolidating new financial infrastructures in the East to both compete, and perhaps usurp long-standing Western systems, Russia has been doing the same for oil. In fact since 2013, Russia has not only broken the petrodollar standard by allowing its oil to be purchased in both rubles and Yuan, but they are in the process of opening a new global market to compete directly with Brent and WTI, and have established new pipelines that will give them a solid lock on distribution to both Europe and Asia.

Contrary to standard belief, it is oil, not currencies which is the true form of money currently running the global financial system. And with some analysts predicting that Russia's gambit to wrest control over production, distribution, and pricing away from OPEC could lead them to potentially control an overwhelming 73% position within the global market, the Eurasian power is now being looked at as a financial center as well, with Kuwait being the first to offer the opening of a bank out of the Middle Easter bloc.