The New Oil Market Multiverse: Physical Commodity Swaps as Instruments for Circumventing Sanctions and Their Implications for the Global Economy

From the global pandemic to the aftershocks of the COVID-19 pandemic and the war in Ukraine, the past few years have witnessed a reordering of global trade flows, most dramatically in the energy sector. Less obviously, these shifts have also precipitated an emerging trend toward alternative forms of commerce operating outside the customary channels of the global financial system. Such alternatives include local currency settlements and physical commodity swaps. Although such instruments are nothing new, their use by state actors as a way to circumvent both sanctions and the dominance of the U.S. dollar has implications that warrant careful study.

23rd May 2024