Saudi Arabia Willing To Trade In Other Currencies Poses Threat To The Petrodollar

The Deep Dive ^ | 1/19/22

[EBH]

Saudi Arabia is opening its economic doors about trading in currencies other than the US dollar, Finance Minister Mohammed Al-Jadaan sounded off at the World Economic Forum in Davos, Switzerland.

“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan said in an interview with Bloomberg. “I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world.”

(snip)

The term petrodollar refers to the US dollar’s position as the primary worldwide currency for international oil transactions. This status was established in the 1970s as part of a pact between the US and Saudi Arabia in which the US committed to provide Saudi Arabia with military protection in exchange for the Saudi government agreeing to price all of its oil exports in US dollars.

This arrangement has contributed to the US dollar’s status as the world’s reserve currency, as well as given the US enormous influence in the global oil market.

In one of his recent dispatches, Credit Suisse contributor Zoltan Pozsar noted that recent geopolitical moves–most especially by China through demanding renminbi settlement–have been contributing in the de-dollarization of global economy.

“The ‘new paradigm’, as I see it, comes with a theme of ’emancipation’,” Pozsar explained. “Both sanctioned and non-sanctioned members of OPEC, with Chinese capital, are going to adopt the ‘farm-to-table’ model in which they will not just sell oil but will also refine more of it and process more of it into high value-added petrochemical products.”

Simply put, the ‘oil for arms’ arrangement in the 1970s that helped the US dollar rise to the role of world currency has now been crowded out by the ‘oil for development’ proposal by China, setting the stage for the yuan’s improved status in the global stage. The latter’s strategy would probably be more effective as renminbi clients like Saudi Arabia have now empowered economies and want the world to recognize further emancipation.

[FarCenter]

Russia, China to hold naval drills off South Africa

JOHANNESBURG (AP) — Russia and China will conduct naval drills in the Indian Ocean off the coast of South Africa next month, in another indication of their strengthening relationships with Africa’s most developed country amid the war in Ukraine and global financial uncertainty.

The South African armed forces said Thursday that they and the Russian and Chinese navies will engage in “a multinational maritime exercise” from Feb. 17-27 off South Africa’s east coast near the cities of Durban and Richards Bay.

The drills will happen around the one-year anniversary of Russia’s invasion of Ukraine on Feb. 24 and will bring more focus on the push by Russia and China for global influence, and the refusal of South Africa — a leading voice on its continent — to side with the West and condemn Russia’s actions in Ukraine.

The announcement also comes days before Russian Foreign Minister Sergey Lavrov is due to visit South Africa and hold talks with South African counterpart Naledi Pandor.

The South African government said it has a neutral stance over Ukraine and has called for dialogue and diplomacy, but the upcoming naval drills have led the country’s main opposition party to accuse the government of effectively siding with Russia.

https://apnews.com/article/russia-ukraine-politics-government-south-africa-e9ae753c82502dbcf0cffd48be97de02

The BRICS may have their differences, but they’re not stupid enough to stop doing business.

[griffin]

Uh-oh.

Regime change coming to Saudi in 3, 2, 1...

[BobL]

“Who will guarantee safe passage of those tankers from the Persian Gulf to Shanghai? “

If China was NOT building Blue Water naval ships at 5 times the pace of the US, I would say: Good Question!

But OBVIOUSLY China knows they need to protect their shipping lanes, and with their Hypersonics, that will not be a difficult thing to do.

[griffin]

Yep. And Saddam. and Bashar (attempted).

[BobL]

It is INTERESTING to note how the Neocon Supporters need to PLAY-DOWN the capabilities of the countries that we will be facing off against.

I suspect that once we get slapped due to their arrogance, we won’t be seeing much of them around here anymore. Of course that won’t matter...since their job will have been completed, which is the destruction of the US as a world power.

[Chode]

Rollover-—212112

[Georgia Girl 2]

The Petro dollar has been dying for years. Its not coming back. The Saudis are positioning themselves for the new QFS system.

[EBH]

Are you really that far out of touch with geopolitical strategies and capabilities?

[EBH]

Yup...and so many here on FR have their heads in the sand ...again.

In 2004 they said it couldn’t happen here...and yet it did.

Now they are in denial of the dollar crisis...

Ya’ll ain’t helping matters.

[GOPJ]

The problem Sauds have (who want to weaken our ‘reserve currency’ status) is our bankers ARE NOT chosen based on WOKE sexual kink, pigmentation, ideology or who their grandfathers were... at least not yet.

[SunkenCiv]

Uh, no. NTSA ping.

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