Saudi Arabia is threatening to start selling its natural resources in currencies other than the US dollar if Washington passes the NOPEC bill exposing OPEC member countries to US antitrust law. There are allegations that this option has been already discussed internally by senior Saudi energy officials, OPEC members and communicated to Washington. The chances of NOPEC being passed are not big and Riyadh would be unlikely to follow through. However, the situation is a reminder of the growing Saudi annoyance about US potential legal challenges to the cartel.
If the kingdom ditched the dollar, this would mostly likely jeopardize its standing as the main reserve currency, reduce the United States’ clout in international trade and weaken its ability to sanction other countries. A decision to move away from the US dollar would also likely resonate very well with big oil companies in non-OPEC countries, which have been lobbying to trade away from the dollar to diversify international trade. “The Saudis know they have the dollar as the nuclear option,” a source commented.
“The Saudis say: let the Americans pass NOPEC and it would be the US economy that would fall apart,” another source said. The Saudi government has not officially commented while the White House said that “as a general matter, we don’t comment on pending legislation.” NOPEC, the No Oil Producing and Exporting Cartels Act, that was first adopted in 2010, aims to remove sovereign immunity from US anti-trust law, paving the way for the cartel to be sued for limiting the production in an attempt to prop up prices. While the bill has never been turned into a law, the legislation did gain a momentum since US President Donald Trump assumed the office.
