By Irina Slav
Saudi Arabia has threatened the United States to stop using dollars for its oil trades in an attempt to discourage legislators from passing a bill dubbed NOPEC aimed at holding OPEC liable for cartel practices under U.S. law.
Reuters reports, citing unnamed sources, that the switch from U.S. dollars to other currencies had been discussed in senior Saudi circles and that it had also been shared with U.S. government officials from the energy department.
The reported threat takes OPEC’s—Saudi Arabia’s—offensive against the No Oil Producing and Exporting Cartels Act a step further after last month UAE oil minister, Suhail al-Mazrouei, reportedly told lenders at the meeting that if the bill was made into law that made OPEC members liable to U.S. anti-cartel legislation, the group, which is to all intents and purposes indeed a cartel, would break up and every member would boost production to its maximum.
This would be a repeat of what happened in 2013 and 2014, and ultimately led to another oil price crash like the one that saw Brent crude and WTI sink below US$30 a barrel. As a result, a lot of U.S. shale-focused, debt-dependent producers would go under.
Now, one of the Reuters sources said, “The Saudis say: let the Americans pass NOPEC and it would be the U.S. economy that would fall apart.”