Saudi Arabia ends 80-year petrodollar deal with US.

[darkangel11]

Which currency will replace PetroDollar?
It's been in the news that Saudi is joining BRICS which means they may be accepting any currency or just the most widely used still.  So far the most used currency still is USD and the next is Yuan so there are just 2 options they have unless they are just going to accept the Saudi Riyal to improve the demand for its currency.

Are they even open to using BTC?

IMO their gal is to either establish a common currency, the way the EU did (but that was somewhat a failure as many EU states did not accept EUR, or to launch a mutually accepted CBDC.
Not accepting the dollar was forced by the US and the EU, because one of the founders of BRICS is Russia and a few days ago it was sanctioned and cut from using dolars and euros. As a result all BRICS countries, even those that are not sanctioned, will drop USD and EUR as an act of solidarity. The more countries join BRICS the more will stop using USD.

[Moreno233]

This is indeed a major news that will cause so much uncertainty in global energy market. I know that Saudi Arabia joining the BRICS nation meant a major shift in their direction and future plans. Actually I never saw this coming as I initially felt it was pure for trade and business. Now that they are cutting tiers with the US, they might be fully open in their collaboration with the Eastern block. Just recently Russia ditched the US dollar and now Saudi is also ditching the US, I sense there will be major realignment going on of which I'm watching with keen interest how it will pan out.

[btc78]

they are not preventing it from happening though, my guess is that they allow this to happen by plan. and i mean they could still make a deal with the Saudis, they are not enemies after all

Maybe in fact they did but it is something they did behind everyone. They could have offered Saudi some better contract, better deal or more incentives to keep the deal. But alas we don’t see everything that is happening.

but from what i have read on some news sites is that Saudi asked to stop the war in Gaza and the nuclear program, but they likely not come to terms with such condition which Saudi and US ended the petrodollar agreement.

USA’s constant support to Israel is what will be their downfall.

[Faisal2202]

There has been news about some countries pushing for de-dollarization of the global economy but this move by Saudi Arabia seems to be a big boost to that goal.

Relaxe guys it was an agreement that came to an end and there are other agreements in the pipeline (there must be). I think SA is waiting for a better deal from the US. Although they already made another deal before the issue of Israel with Palestine. They said they would collaborate with Israel if the US would provide army defense and other equipment to increase their defense system. Currently, they are the suppliers and the world is full of buyers.

So don't worry SA will make a deal with the US again but maybe due to Hajj, they are not focusing on this issue right now. Maybe in 1 or 2 days, they will announce their next plan. Because as far as I understood the SA behavior they are not going to go against the US in any way.

[Yaqs15]

The US has been very centralized and sanctioned some countries which some countries do not like and it is leading to de-dollarization. Some decentralized money like bitcoin would have been better to be the world's dominant currency.

But most of this countries do not know the plan of China. I hope they will know that China is trying to have the world power and shift the power from the West to themselves. Countries like Russia and Iran also want that.

Every one loves to be hero not only China or Russia. if really you know your worth and will want to be addressed with reputation, you will want to be free especially, financially. So even if SAUDI ARABIA should take such decision, to me, it will be a welcome development and economic enlightenment to other countries that have not taken such decision. since every country has its own currency, why wouldn't each country try to strengthen their currency for transaction? Why would they depend solely on dollars for international transaction? America is not the only developed country but also China, England and even SAUDI ARABIA have gone far economically. So if this is what they are planning to do, fine.

[Fiatless]

This is definitely an interesting development and we have to watch how things change over the next year to be sure. But for now, I remain skeptical.

Politicians cannot be trusted because they can be deceitful. But for sometime we have seen Saudi Arabia shifting away from dependence on the US since the election of Joe Biden. The Saudis see Donald Trump as a worthy partner than the present president. I suspect that the killing of Jamāl Aḥmad Khāshqujī also led to the deteriorated the relationship between both countries.

Last year China brokered peace between Iran and Saudi Arabia and both nations agreed to revive ties. I don't know how both nations are relating now. But it is possible that they reason why Saudi Arabia is shifting it's relationship to China, Iran and Russia is to put pressure on the US but we just have to wait to see how things plays out. And one of the indicators to show which side the belong is thier commitment to the BRIC alliance and their ability to oppose US policies in the Middle East.

[bittraffic]

Which currency will replace PetroDollar?
It's been in the news that Saudi is joining BRICS which means they may be accepting any currency or just the most widely used still.  So far the most used currency still is USD and the next is Yuan so there are just 2 options they have unless they are just going to accept the Saudi Riyal to improve the demand for its currency.

Are they even open to using BTC?

There are many fiat apart from USD, for example, euros can be used for Yuan, Yen and who knows it might be BTC too.

This is a sign that the USD is losing its dominance and so called superpower, but this may not affect the entire system but what if every government follow the same path soon it is going to be a huge loss for US and people who trusted USD as the strongest fiat and this is beneficial for the cryptocurrencies cause if those international trade requires something that has fair value on the market and not influenced by centralized entity then BTC can be considered as an option.

It would take more than a decade before things will really change though. USD stablecoins dominate even in crypto so wherever we go USD is still the most widely used currency.  I'm not even sure if people are comfortable using Yuan but if everything is breaking apart we can always go back to Gold coins, nothing is better than having sound money that goes ka-ching when it falls to the ground.

[pooya87]

But for sometime we have seen Saudi Arabia shifting away from dependence on the US since the election of Joe Biden. The Saudis see Donald Trump as a worthy partner than the present president.

It's a lot more complicated than that. The shift has been started and Arab regimes are decreasing their dependence on US regime but it started in Trump administration even though they still weirdly favor Trump over Biden.

These Arab dictators need US and CIA to be able to continue their reign, otherwise they'll be toppled and replaced by democracies. They also need US military to provide them with protection  (which is something they purchase annually) so that they can continue their wars against their neighbors. That's not going to change overnight but as you said the shift has started.

The reason for that shift is that they have been getting scammed all these years. US military is neither capable of nor willing to provide them with any kind of protection. This became more apparent during Trump administration and the relationship started falling apart back then.

I say 3 major events were the tipping point over the years.
(1) Yemen
More than 9 years ago the Arab coalition (mainly Saudi and Emirati dictators) with the help of US regime decided to expand their territories so they invaded the poorest Arab country, their neighbor Yemen and committed genocide there. They wanted more geopolitical power, control over an important choke point (Bab al-Mandab strait) and access to the Gulf and Aden and the Arabian sea.
But things didn't go according to the plans. At some point the Yemeni resistance got stronger and also joined THE Resistance in West Asia. By 2019 they were attacking the US-Arab coalition forces hard and were dealing a lot of damage, eventually defeating the invaders.
- For example US military bases that were supposed to be protected, proved to be wide open to all these attacks and all US defenses (Patriot, THAAD, etc.) proved to be impotent. [cough]Shahed-136[cough]
- The same thing happened to Saudi bases and infrastructures. Like the Saudi Aramco (5th or 6th largest company in the world) that lost 50% of its production in one night despite being fully protected by large number of US modern air defense systems This actually led to a lot of fights between al-Saud and Trump back then, distancing Arabia from America.

(2) Iran
One of the reasons why US has a military presence in these Arab countries is because they basically created a boogeyman out of Iran and scared the Arab dictators into paying US to be there. They were basically telling them that Iran would swallow you whole if US isn't there to "protect" them. Specially since in the 1980's these Arab dictators were backing the Ba'athi dictator of Iraq, Saddam in his invasion of Iran.
But all of that changed overnight!
- On 3 January 2020, Trump broke the international laws and ordered an act of terror to assassinate an Iranian general (the commander of counter terrorism forces helping eliminate ISIS in Iraq and Syria) on an official diplomatic mission in Iraq.
- On 8 January 2020, Iran retaliated by bombing the shit out of two of the most protected US military bases in Iraq eliminating over 140 US military personnel (I have to mention that US regime has not yet admitted to any casualties to this day).
This proved one thing that US military "protection" has always been an illusion as they were incapable of even protecting their own bases and despite all the chest pounding by Trump (eg. on 4 or 5 January before Iran's retaliation he threatened to hit 52 sites "very hard" in Iran if Iran retaliated at all) he was incapable of doing anything whatsoever.
I'd say that was the last nail in the coffin of Saudi (and other dictators') dependence on US regime during Trump administration. Which is when the distancing speeded up.

(3) Israel
At the end of the day US regime sees Israel as its military based and military arm in the West Asian region. They will always give all their modern weapons (eg. F-35 combat aircraft) to Israel and will never give them to Arab dictatorships. It's not just in the military field, it is in every field like technologies, clean energies, foreign investment, even industries that they are never allowed to build.
This is why these dictators are seeking all of that elsewhere. For example they are acquiring missiles with the help of Chinese and are building their nuclear energy facilities with the help of the Eastern Bloc.
I have to also mention that the Operation True Promise played an important role this year as well. When the entire NATO despite wasting a billion dollar an hour ($4 billion total) couldn't even defend against that tiny attack using lowest tier weapons, and weren't even willing or capable of any response, how could they protect the Arab dictators?

Last year China brokered peace between Iran and Saudi Arabia and both nations agreed to revive ties. I don't know how both nations are relating now. But it is possible that they reason why Saudi Arabia is shifting it's relationship to China, Iran and Russia is to put pressure on the US but we just have to wait to see how things plays out. And one of the indicators to show which side the belong is thier commitment to the BRIC alliance and their ability to oppose US policies in the Middle East.

The Saudi usurpers' animosity toward Iran is very old. The only reason for this recent shift is that they failed miserably in all their plans over the past decades. I already mentioned Yemen, bin Salman al-Saud was thinking he could quickly annex Yemen and reroute his oil sales through there and stop using the Strait of Hurmuz (the Iranian strait) then declare war on Iran with the help of the "superpower" US. LOL
By the early days when he was still full of hot air, he was openly threatening Iran with war; there is a famous quote of him saying "he'll take the war to streets of Iran".

Little did he know that spending $233 billion would only bring him to his knees without being able to achieve anything in Yemen. That's what the peace treaty was. Him on his knees accepting defeat trying to find a way to stop the drones and missiles from raining down on him coming from Yemen, the country he invaded.

But of course he is also trying to hit other birds with that stone: seeking a future elsewhere (with China, Iran and Russia), putting pressure on US for better deals, etc.

[davis196]

The petrodollar deal is 50 years old, not 80 years old. It was signed back in 1974. Maybe you should change your thread title.
Maybe the world actually needs dedolarisation. The Americans have been living in debt for too long. I don't think that the end of petrodollar would be a disaster for the USA. It will be more like a slow decline of the power and global influence of the US dollar rather than a disaster.
The Kremlin propagandists keep posting hysterical articles about "the end of the US dollar" and "the collapse of the western world" and I think that they are clearly exaggerating. I expect higher inflation in the USA and a new EU/USD currency ratio, where the euro will become more expensive.

[shield132]

The reason why I say this is an empty political move is exactly this. They may be only "playing their cards" and putting pressure on US regime to change its decision about giving them all that stuff.

Things are getting very interesting. To be fair, the USA got a slap in the face from our country too. Our country took the law of foreign agents, the USA and European Union are against this law and warn our country that this law will come with consequences, they already sanctioned our politicians. I don't know why this law is a problem but to be fair I prefer to stick with the USA and EU instead of Russia and BRICS. Our slap is nothing important but a slap from Saudi Arabia is significant. I don't know what's happening but things aren't going well. For some reason, the USA is getting enemies and countries try to get far away from it but this is what I don't understand. We have been part of the Soviet Union and our experience with Russia is terrible while our experience with America and the EU is very good. There are massive protests in my country because of this law that ruined our relationship with Western countries.
Our country offered the USA that we will not take law if they offer visa-free moves between Georgia and the USA.

[justdimin]

There has also been some political disaffection between both countries. The petrodollar deal is one of the reasons why the dollar is a popular currency in international trade especially in the oil and gas sector. Therefore the end of the petrodollar deal could accelerate global de-dollarization and that would be a disaster for the U.S. economy.

There has been news about some countries pushing for de-dollarization of the global economy but this move by Saudi Arabia seems to be a big boost to that goal.

I would not expect SA to cut their ties with USA that easily to be fair. Because, they are deep connected in financial sense, and military as well, if they stop right now, not only it will take a while for them to recover financially because getting that income would require years to build a relationship with other nations, but also it would mean that they will not get military help, plus it means that USA will "hate" you, so you won't get favourable stance from them neither, anything that goes wrong, means it is going to be tough.

This is USA we are talking about, they have invaded nations like Iraq for far less, they are a little bit loose cannon and trouble for the world, so SA should not go against them this clearly, I would say slowly getting away would be better than a sudden one.

[pooya87]

Our country took the law of foreign agents, the USA and European Union are against this law and warn our country that this law will come with consequences, they already sanctioned our politicians.

Of course they are going to get angry and sanction your country.
All these so called non-government organizations like European Economic Development Fund, National Endowment for Democracy, etc. are just a front for soft power regime change organizations that are funded by US and EU operating inside other countries like Georgian soil under the cover of economy, development, democracy and all those pretty words but what they're really doing is regime change in favor of the West!

I don't know why this law is a problem

Because all these foreign funded organizations that are working under a disguise would be brought to light as foreign agents and their "coup" plans become that much harder to execute.

BTW this exact law exists in all other countries including US, EU, Canada, etc. and such a law only worries those who want to hide not those who have nothing to hide... So you see how it is beyond absurd that US and others are complaining that Georgia is passing a law that they already have!
For example that legislation in USA is known as Foreign Agents Registration Act (FARA) that was enacted in 1938.

but to be fair I prefer to stick with the USA and EU instead of Russia and BRICS.

I think countries like Georgia because of where they're located (like Ukraine, Turkey, etc.) must always remain neutral. Meaning they should have relations with everyone but not fall into the arms of any side at the same time.

If Georgia falls into the arms of Russia, at the very least it will be sanctioned by NATO members and that's goodbye to economy. If Georgia falls into the arms of NATO, it will become Ukraine 2.0 although it's not going to take as long.
We already know what happened in 2008 when Mikheil Saakashvili listened to Condoleezza Rice who convinced him US would help and invaded south Ossetia. We saw how US didn't even lift a finger in help when Russia invaded in response.

[bitgolden]

I would guess that a nation who wants a bit more independence and not just look at the hands of another nation is the main point for them. That does not mean that they dislike USA or anything, they are probably still an ally, and they would probably still sell oil and buy weapons, that is still the possible outcome of all of this.

The thing is that they just want to make sure that they are strong on their own as well, without having US Dollars, because lets face it, 50% of all the dollars in the world was printed in the last 5 or so years, hence dollar seems like it is not as trustworthy as it used to be. 250 years made 50%, and then 5 years made the other 50%, that seems weak, don't you think? Just let SA test this out, if they dislike it, they can always go back.

[electronicash]

I would guess that a nation who wants a bit more independence and not just look at the hands of another nation is the main point for them. That does not mean that they dislike USA or anything, they are probably still an ally, and they would probably still sell oil and buy weapons, that is still the possible outcome of all of this.

The thing is that they just want to make sure that they are strong on their own as well, without having US Dollars, because lets face it, 50% of all the dollars in the world was printed in the last 5 or so years, hence dollar seems like it is not as trustworthy as it used to be. 250 years made 50%, and then 5 years made the other 50%, that seems weak, don't you think? Just let SA test this out, if they dislike it, they can always go back.

they still can buy oil and gas in Saudi. but they have Venezuela and Canada for gas and oil sources. but afaik, the BRICS encourage local currencies which they likely can accept USD. they are just unsure what to do with the USD since there is no product to buy from the US. unless they are going to sell their muscle cars in the Middle East i think people will still love those Ford Torinos.

[STT]

Saudi Arabia is a growing country, they have no option but to match that growth in their economy in order to maintain the best prospects for the country in future.   They are doing all sorts of things you might not expect like Solar power and investment in alternatives to oil which one day might not be as important.

I wonder if some countries may become uninhabitable from global warming as it continues over the decades. Its already 50c in the cities now and the energy to power cooling to match that unsustainable temperature for humans is not readily available to all of the people making pilgrimage etc.   Netherlands and parts of Europe will descend below the sea level greater every year, the challenges ahead are massive in some cases.

The feedback to the Dollar from this lack of backing may not be obvious at first. USA has become great enough in production to join OPEC in theory but they are also too heavy on consumption to be in a stable situation for that commodity and energy in general USA must adapt to be more versatile and capable of all kinds.   It does see like SA is making it own way and USA will need also to be less reliant on oil revenues for its economy generally.

[kryptqnick]

Saudi Arabia is not a BRICS member. They are considering membership but haven't joined even though they were, of course, invited. So I'm thinking they're just taking the end of the previous deal with the USA as an opportunity to get a better long-term deal for the future, now that they have some leverage. I don't believe that Saudi Arabia will seriously choose BRICS and a very unpromising dedollarization project over a strong, albeit tense relationship with the world's biggest economy.
I think the US will be fine either way, but that Saudi Arabia is just looking for the best option for them.

[pooya87]

Saudi Arabia is a growing country, they have no option but to match that growth in their economy in order to maintain the best prospects for the country in future.   They are doing all sorts of things you might not expect like Solar power and investment in alternatives to oil which one day might not be as important.

Their dictator is trying but I still wouldn't call it "growth" and it doesn't look like an investment to me. It looks more like purchasing a service.

For example when we talk about the investment in clean energies (like solar power) in Europe we are talking about investment in domestic companies, in research and development done domestically to manufacture solar panels and acquire the technology to later install the infrastructure and use it.
What the Saudi dictator is doing is to sell crude oil, take the money and pay it to anther company (American, European or Chinese) to come and install some solar panels in Arabian desert. So they just purchase a service. If a single screw comes loose on one of the panels they have to pay the same company to come and fix it!