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 USDollar'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.
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…
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