RIYADH – If the US passes a bill that imposes sanctions on OPEC countries, Saudi Arabia may abandon dollar payments for oil sales.
Last week, Reuters reported, citing its sources, that if Saudi authorities meet this threat, the US economy will collapse.
The Congress is preparing to discuss the NOPEC bill (Oil Production and Export Cartel Prohibition Act). The document considers illegal OPEC decisions as well as any joint actions by governments in other countries (except the US) aimed at restricting oil production and regulating commodity prices.
If the law is passed, US courts will have authority to consider antitrust claims against OPEC member countries and other countries that conclude agreements on joint actions in global oil markets. Americans believe that this rule will reduce gasoline prices.
However, many experts warn that the NOPEC can have a devastating effect and calculate that the cessation of OPEC will lead to a collapse of the quotations. United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazrouei noted that if the rule is adopted, the American shale industry will be the first to suffer: OPEC will cease to function and each country will increase output to reducing oil prices.
The largest oil producing country, Saudi Arabia, has reacted to the bill threatening to replace the dollar with other currencies if the US approves the NOPEP project.
“The Saudis know they have the dollar as the nuclear option,” one of the sources familiar with the matter said to Reuters.
“The Saudis say: let the Americans pass NOPEC and it would be the U.S. economy that would fall apart,” another source said.
This warning should not be ignored by Washington, as large oil consumers, especially China and the EU, are also calling for a reduction in the share of US currency in international trade.
However, Russia and Iran, which have expressed a willingness to sell oil for euros and yuan, are already making their first deals in national currencies.
If Saudi Arabia, which controls a tenth of world oil production, refuses to sell oil for dollars, the dollar’s overall position will be weakened. This would drastically reduce Washington’s influence on world trade, including the effectiveness of US economic sanctions against other countries.
Still, the chances that Trump will sign NOPEC, even if it is approved by lawmakers, are virtually zero, according to the article columnist. Riyadh tries in this way to show that it is not obedient to Washington and that he has means of pressure on the partner. Therefore, the White House will have to consider more the interests of the Saudis in the future.