[ad_1]
Saudi Arabia has threatened the United States to stop using dollars for its oil trade to dissuade legislators from enacting a bill called NOPEC to hold OPEC responsible for cartel practices under the law. US legislation.
Reuters reports, citing unnamed sources, that the move from US dollars to other currencies had been discussed in high Saudi circles and that it had also been shared with US officials of the Department of Energy.
The reported threat takes OPEC's (Saudi Arabia) offensive against the oil and gas export cartels law, a step further after the United Arab Emirates oil minister Suhail al-Mazrouei told lenders OPEC members being subject to US anti-cartel legislation, the group, which is for all practical purposes a cartel, would separate and each member would increase production to its own. maximum.
This would be a repeat of what happened in 2013 and 2014 and eventually led to another drop in oil prices like the one that saw Brent crude and WTI go down below $ 30 a barrel. As a result, many debt-laden and shale-focused American producers have collapsed.
One Reuters source said: "The Saudis say let the Americans adopt NOPEC and it would be the American economy that would fall apart."
Another source commented "The Saudis know that they have the dollar as a nuclear option."
Other countries already use other currencies in their oil exchanges, including Russia and Iran, but also China for some of its trade. China even launched a yuan-denominated oil deal last year, which initially sparked concern. Later, this trend eased as the hype dissipated and the contract failed to remove from the market European, Middle Eastern and US contracts denominated in the United States. dollars.
Nevertheless, if an oil seller as important as Saudi Arabia abandons the dollar as the default trade currency, the status of the greenback as the dominant currency in the world would be strongly reverberated, which could also incite Other oil exporters feel threatened by the NOPEC bill.
By Irina Slav for Oilprice.com
More from Reading Oilprice.com:
[ad_2]
Source link