We’ve known for years that diamonds aren’t rare enough to be super-expensive, but given the way the DeBeers cartel has, over the decades, successfully employed rationing and romance, diamond demand and diamond prices have remained high … so far.

Jewelers, sitting on stones purchased at top prices, may not feel comfortable forever, and yet another segment of the retail economy could be imperiled by Russia’s announcement of a big diamond sale.

Russia produces a lot of diamonds which it once marketed through the DeBeers cartel, but a ruling by the World Court changed all that with its opinion that such marketing stifled competitive pricing.

Two years ago, the US led global trade sanctions against Russia during the Ukraine crisis. Since then Russian inventories of domestically-produced diamonds have swollen. At the same time the value of the Ruble has shrunk. We have to assume that Russia will do what’s good for the Russian economy, so, in a move that’s likely to be repeated, Russia recently announced that some of its diamonds, which have been kept off the market, are being sold at auction. We know Russia has arranged long-term sales of petroleum products to China, so, the big question is, “How far will Russia go in finding new markets–perhaps lower-priced ones–for its high-quality diamonds?”

The industry outside Russia professes not to be concerned about the auction of 167,000 carats of oversupply because only Russians can bid on the diamonds. These diamonds may not be of exceptional size or quality, but one has to think Russian inventories contain bigger and better stones, and that ways will be explored to bring these stones onto the global market. But, if it happens, can it happen without undercutting the mystique, magic and up-scale price structure cultivated so profitably and so long by DeBeers? Would DeBeers allow that to happen if eventually it meant that every diamond–whether privately owned or in industry inventories–would be re-valued?