Russia’s move in rejecting all outside help for the development of the Shtokmas field is a small subtle but potentially dangerous long term warning signal to nations that are low in natural resources, especially to the United States which imports the bulk of its oil. Let’s take this move one step further. If a nation or for that matter certain companies start to feel that the price of the commodity is too low they can hold back on developing new fields or maybe even drastically cut down production in anticipation of much higher prices in the future. Essentially oil, natural gas, coal etc can now be considered as money in the bank and the longer someone holds out the higher the rate of return (interest). Russia is loaded with dollars and it wants to drastically reduce its holdings and come up with an alternative currency to price oil and other natural resources. Don’t be surprised if they start of by giving the appearance that they want to embrace other currencies but actually make a push for their own resources to be priced in Russian Rubles.

Putin made the following comments on May 10, 2006

Our goods are traded on global markets. Why are not they traded in Russia?” Putin said. “The ruble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for with rubles,” Putin said Wednesday.

In his Wednesday’s address, Putin urged work on achieving ruble convertibility sped up and completed by July, six months ahead of the original January 1, 2007 deadline.

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