Saudi Arabia Not Renewing Petrodollar Agreement: A New Era for Oil Trade

Saudi Arabia has ended its long-standing agreement to price oil in US dollars, a move that could have far-reaching consequences for the global economy.

This decision was made official on March 6, 2022, when the Saudi Arabian Monetary Authority announced that it would no longer require oil exporters to price their crude in dollars.

The petrodollar agreement, which has been in place since the 1970s, has been a cornerstone of the US dollar's global reserve currency status. It's a big deal, and its implications will be felt for years to come.

The US dollar's value may take a hit as a result of this change, potentially leading to increased inflation and a decrease in purchasing power for American consumers.

The global economic implications of Saudi Arabia not renewing the petrodollar agreement are significant.

The US dollar could lose its status as the global reserve currency, which could lead to a decline in its value.

The petrodollar has been the backbone of the US economy since the 1970s, with Saudi Arabia being the largest oil exporter and a key player in maintaining the dollar's value.

This could lead to a surge in oil prices, making it more expensive for countries to import oil, and potentially triggering a global recession.

Saudi Arabia's decision to abandon the petrodollar agreement could also lead to a shift in global trade, with countries like China and the European Union seeking alternative currencies for their oil transactions.

The US would likely face significant economic losses, including a decline in its trade balance and a reduction in its foreign exchange reserves.

The global economic implications of this decision would be far-reaching, with potential impacts on global trade, finance, and politics.

Saudi Arabia has ended a 50-year petrodollar deal with the US, marking a significant shift in their economic relationship.

This decision is likely to have far-reaching consequences for the global economy, with some predictions suggesting an oil surplus by 2030.

The move has been met with various reactions from around the world, with some outlets, like Eurasia Business News, covering the story.

Some of the key events surrounding this decision include a US ATACMS missile attack in Sevastopol, which resulted in 153 victims.

The Russian Duma has also adopted a law on the main directions of tax policy, which may be related to the changing economic landscape.

Exports of Russian titanium to the EU have fallen by 22%, a significant drop in a crucial industry.

American Express has left Russia, another sign of the economic tensions between the two countries.

The Tuaregs claim to have defeated Wagner PMC fighters in Mali, a development that may be connected to the broader regional dynamics.

Here are some of the key events surrounding Saudi Arabia's decision to end the petrodollar deal:

China has been pushing for the yuan to be used in external trade, including with Saudi Arabia.

In 2023, China and Saudi Arabia signed a $7 billion local currency swap agreement to boost trade using their currencies and reduce their reliance on the dollar.

The yuan is also playing a key role in the mBridge project, launched in 2021, which aims to develop a new system for cross-border payments using central bank digital currencies.

Saudi Arabia has signalled its interest in joining the BRICS grouping of countries, which is discussing an alternate trading currency.

Several member-states of BRICS have already initiated trade in local currency between themselves.

The yuan's growing influence is a significant development in the de-dollarisation process underway in international trade.

Saudi Arabia's decision not to renew the petrodollar agreement has sent shockwaves through the global economy.

The country's economy is heavily reliant on oil exports, which account for around 85% of its total exports.

This move is a significant shift in the global financial landscape, as the petrodollar has been the dominant reserve currency since the 1970s.

The agreement, which was initially signed in 1974, has allowed the US to maintain its status as a global economic superpower.

The US has been the largest beneficiary of the petrodollar system, with the country's central bank holding around 40% of the world's foreign exchange reserves.

Saudi Arabia's decision to abandon the petrodollar agreement has sparked concerns about the potential impact on the global economy and the US dollar's value.

We're living in a world where the rules are changing fast. A multipolar world is emerging, where no single country has complete control. The global geopolitical and economic context is different from what it was in the 1970s.

The dollar's status as the global reserve currency is being eroded. According to IMF data, it now accounts for 58% of global official reserves, down from over 70% two decades ago.

The rise of alternative currencies and trade agreements is gaining momentum. Saudi Arabia's finance minister, Mohammed Al-Jadaan, announced at the 2023 Davos Forum that the kingdom is open to accepting local currencies for oil trading.

Oil sales in other currencies are no longer a novelty. The kingdom reaffirmed this decision on a visit to India last September, signaling a shift away from the traditional petrodollar agreement.