If Saudi Arabia were to in fact go ahead with the move it would have significant geo-economic and geo-strategic changes. Riyadh depends on the United States militarily to defend itself against arch rival Iran.
In a significant development, Saudi Arabia has threatened to sell its oil in currencies other than the the U.S. dollar if the United States was to pass a bill which exposes OPEC members to U.S. antitrust lawsuits, said 3 sources familiar with the Saudi energy policy.
In recent months, this option had been discussed internally by senior Saudi energy officials and according to two sources familiar with the matter at hand, the plan had even been discussed with OPEC members.
According to a source briefed on the Saudi oil policy, Riyadh had also communicated the same to senior U.S. energy officials.
While the likelihood of the U.S. bill, known as NOPEC, was slim, it is unlikely that Saudi Arabia would follow through with its threat. But the very fact that Riyadh is even considering such a step underscores the kingdom’s annoyance on the potential U.S. legal challenges to OPEC.
If the Saudis were to go ahead with the plan, the USD would lose the status as the world’s main reserve currency, which in turn will reduce Washington’s clout in global trade and weaken its ability to enforce sanctions on nation states.
“The Saudis know they have the dollar as the nuclear option,” said a source 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,” said another source.
Saudi Arabia’s energy ministry did not respond to a request for comment.
As per a statement from a U.S. state department official, “As a general matter, we don’t comment on pending legislation.”
The U.S. Energy Department did not respond to a request for comment.
Energy Secretary Rick Perry has said that NOPEC could lead to unintended consequences.