Saudi Arabia threatens to dump the petrodollar
Exclusive: Saudi Arabia threatens to ditch dollar oil trades to stop 'NOPEC' - sources https://t.co/SlSrpIZmx1 pic.twitter.com/Cn5ASdOA7J
— Reuters Top News (@Reuters) April 5, 2019
When Saddam sold oil in Euros we destroyed Iraq.
When Gaddafi threatened to sell oil in something other than dollars we destroyed Libya.
Iran and Russia are currently selling oil in Euros. Both nations are under extreme unilateral U.S. sanctions.
So this threat by Saudi Arabia is something serious.
Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.
The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign of the kingdom’s annoyance about potential U.S. legal challenges to OPEC.In the unlikely event Riyadh were to ditch the dollar, it would undermine the its status as the world’s main reserve currency, reduce Washington’s clout in global trade and weaken its ability to enforce sanctions on nation states.
“The Saudis know they have the dollar as the nuclear option,” one of the sources familiar with the matter said.
“The Saudis say: let the Americans pass NOPEC and it would be the U.S. economy that would fall apart,” another source said.
Using our military against the home of Mecca isn't an option.
OTOH, rejecting our military support would be suicide for the monarchy.
So I see NOPEC being tabled to avoid this choice.
Nevertheless, this open threat reveals the weakness of the petrodollar.
The exclusivity of the U.S. dollar as a vehicle for global crude oil trading is increasingly being challenged by other currencies.China, caught in a trade war with the U.S., is expanding oil trading denominated in yuan, while Russia and the European Union are also seeking to reduce their dependence on the dollar for payments for oil. Awareness of risks stemming from heavy reliance on the dollar is growing now that the U.S. government has reimposed sanctions against Iran including on its oil exports.
...
In May, the administration of U.S. President Donald Trump announced the re-imposition of sanctions against Iran, calling for other countries to cut imports of Iranian oil to zero. China, however, is set to continue importing oil from Iran."As the biggest importer of Iranian oil, China is likely to continue imports in yuan and may hedge against price fluctuations on the Shanghai market," said Takayuki Nogami, chief economist of Japan Oil, Gas and Metals National Corp.
When you think of it that way, then headlines like this make more sense.
Comments
How about exposing OPEC members to climate change lawsuits?
They’re the ones who have profited most from increasing the CO₂ concentration of the atmosphere.
Imagine we had followed the second part of the Carter Doctrine
Instead of electing Ronnie Raygun and building SUVs...
Or even if we had done so 12 years later after we had elected the Clenis...
" In the beginning, the universe was created. This has made a lot of people very angry, and is generally considered to have been a bad move. -- Douglas Adams, The Hitch Hiker's Guide to the Galaxy "
I'm betting that there is a day in the future when that happe
One day something will happen that breaks up this deal we have with the Saudis. They too have been buying Russian military stuff instead of ours. They haven't sent much money for the billions we sold them in weapons since Trump made that deal.
We offered Turkey a billion to make the launching pad or whatever it's called for our missile system, but they are going with Russia's instead. So we threaten not to sell them our F- 35's. They might think we're doing them a favor since it has so many problems. Geez just how long have they been building it and it's still a duck?
Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.
Many economists mark Saudis dropping the Petrodollar
....as a black swan event that will finish dollar hegemony.
The mechanism by which this happens varies. Some say that when Saudi Arabia agrees to sell oil to China and accept payment in Yuan, that will end the petrodollar deal made in 1973, which pegged the dollar to oil.
____________________
The political system is what it is because the People are who they are. — Plato
yes. Same thing I have read.
The end of the petrodollar is the end of US dominance.
In my humble opinion, given the true state of the Union, we don't need to be dominating anybody.
"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981
Nonsense,
KSA would do no such thing, ever. Their fragile grasp on power would collapse utterly and completely.
"Obama promised transparency, but Assange is the one who brought it."