ARTICLE

Economic Shockwaves: Saudi Arabia Is Threatening To Drop The Petrodollar

News Image By Tyler Durden/Activist Post April 09, 2019
Share this article:

Three year ago - almost to the day - Saudi Arabia rattled its first sabre towards the United States, with an implicit threat to dump US Treasuries over Congress' decision to allow the Saudis to be held responsible for the 9/11 attacks.

In a stunning report at the time by the NYTimes, Saudi Arabia told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars' worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.


Then, six months ago, the Saudis once again threatened to weaponize their wealth as the biggest importer of arms from America in the world.

And now, Reuters reports, citing three unidentified people familiar with Saudi energy policy, Saudi Arabia is threatening to drop the dollar as its main currency in selling its oil if the U.S. passes a bill that exposes OPEC members to U.S. antitrust lawsuits.

While the death of the petrodollar has long been predicted (as the petroyuan gathers momentum), this is the most direct threat yet to the US Dollar's exorbitant privilege...

"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.

Riyadh reportedly communicated the threat to senior U.S. energy officials, one person briefed on Saudi oil policy told Reuters

As Reuters details, NOPEC, or the No Oil Producing and Exporting Cartels Act, was first introduced in 2000 and aims to remove sovereign immunity from U.S. antitrust law, paving the way for OPEC states to be sued for curbing output in a bid to raise oil prices.

While the bill has never made it into law despite numerous attempts, the legislation has gained momentum since U.S. President Donald Trump came to office. Trump said he backed NOPEC in a book published in 2011 before he was elected, though he not has not voiced support for NOPEC as president.


Trump has instead stressed the importance of U.S-Saudi relations, including sales of U.S. military equipment, even after the killing of journalist Jamal Khashoggi last year.

A move by Saudi Arabia to ditch the dollar would resonate well with big non-OPEC oil producers such as Russia as well as major consumers China and the European Union, which have been calling for moves to diversify global trade away from the dollar to dilute U.S. influence over the world economy.

Russia, which is subject to U.S. sanctions, has tried to sell oil in euros and China's yuan but the proportion of its sales in those currencies is not significant.

Venezuela and Iran, which are also under U.S. sanctions, sell most of their oil in other currencies but they have done little to challenge the dollar's hegemony in the oil market.

However, if a long-standing U.S. ally such as Saudi Arabia joined the club of non-dollar oil sellers it would be a far more significant move likely to gain traction within the industry.

Perhaps this explains why Russia has been dumping dollars in favors of gold in recent months…



And why China suddenly admitted to increased gold reserves…



And why there has been a spike in yuan buying by reserve managers last year, as the IMF pointed out in a recent report.



So the next time you hear an analyst on CNBC categorically dismiss the notion that the loss of the dollar's reserve currency status isn't something that markets should take seriously (even as several credible voices have warned that it should be), you’d do well to remember this chart.


Nothing lasts forever.




Other News

June 29, 2020Social Media War On Christian Content - Worship Now Deemed 'Harmful'

Instagram is censoring a Christian worship leader who wants to post videos of praise and worship from places where there has recently been...

June 29, 2020I Am A Watchman - Interview With Founder Of Prophecy News Watch

If you have been wanting to learn more about the origins of Prophecy News Watch and how it came about as well as some commentary on what i...

June 29, 2020The Culture Wars Come For The White Jesus Statues

What, exactly, did Jesus look like? Was he black? Brown? White? Red? Yellow? We know that he was a first-century, Galilean Jew. But, beyon...

June 29, 2020The Growing Use Of Social Credit Scores To Reward/Punish Citizens

The ever-increasing centralization of data is creating the push towards a scoring system by which governments will rate their populations....

June 24, 2020Globalists Reveal That The 'Great Economic Reset' Is Coming In 2021

Now in 2020 we see the globalist plan coming to fruition, with the elites revealing what appears to be their intent to launch their reset ...

June 24, 2020The Conservative Effort To Reshape The Supreme Court Has Failed

It is time to admit the truth. Throughout my entire lifetime, Republican presidential candidates have promised us that if we help get the...

June 24, 2020Race Is Not What Is Dividing Us

My fellow-Americans, we are being sold a bill of goods. Race is not what is dividing us. Rather, we are being divided by competing ideolog...

Get Breaking News