Russia is considering returning to the US Dollar settlement system, according to a Bloomberg report. The report refers to an internal Kremlin memo that lists areas for possible US\u2013Russia cooperation.<\/p>\n
The memo includes a possible return to US Dollar-based settlement, joint oil and natural gas ventures, cooperation on critical raw materials, and nuclear energy work. It also mentions AI-linked projects and preferential conditions for US firms re-entering Russia.<\/p>\n
The memo says any move would depend on the US lifting sanctions on Russia, including restoring access to US Dollar transactions. Western officials quoted in the report question whether Russia would move away from China, which supplies components used in Russia\u2019s war economy.<\/p>\n
According to the memo, US Dollar integration would stabilise Russia\u2019s balance of payments and its foreign exchange markets. For the US, it would reinforce the US Dollar\u2019s role as a reserve currency and could rebalance global energy trade costs between China and America.<\/p>\n
After the news, the US Dollar Index (DXY) trimmed earlier losses. It had fallen to around 96.74, then traded at 96.93 and approached 97.00.<\/p>\n
This news introduces a significant geopolitical variable into what has been a relatively static situation for the last few years. Given the market’s memory of the extreme volatility in 2022, we should anticipate a sharp increase in the implied volatility of options on currency and energy futures. For traders, this means now is the time to consider strategies that benefit from a large price swing, regardless of direction.<\/p>\n
The US Dollar Index, currently trading around 104.5, would be a primary beneficiary of any credible move by Russia to re-enter the dollar system. Such a development would powerfully counter the de-dollarization narrative that has gained traction since sanctions were imposed, likely triggering a strong rally in the greenback. We see value in purchasing long-dated call options on the DXY or related currency futures to position for this outcome.<\/p>\n
We must also consider the direct impact on the ruble, which has remained weak against the dollar, trading above 140 for most of 2025. A confirmed policy shift and the lifting of sanctions would cause a dramatic strengthening of the Russian currency. While direct derivative access is limited for most, this highlights the immense binary risk in any assets with exposure to the Russian economy.<\/p>\n
In energy markets, where we have seen Brent crude prices sustained above $85 per barrel, this development poses a clear bearish risk. The prospect of joint ventures and restored Russian integration into western energy markets points to a significant increase in stable, long-term supply. Therefore, we should be looking to buy put options on crude futures for late 2026 to hedge against or profit from a potential price decline.<\/p>\n
However, the deep skepticism surrounding a potential Russian pivot away from China means this outcome is far from certain. This creates a classic binary event where talks could collapse, causing markets to snap back to their prior state. This uncertainty reinforces the utility of using defined-risk option strategies, like straddles, to trade the potential for a major move without betting on the specific direction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Kremlin memo suggests Russia may return to dollar settlements if sanctions lift, proposing broader US energy cooperation.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41738"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41738\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}