The world’s largest supplier of crude oil, Saudi Arabia, is open to negotiating non-dollar oil trade settlements, according to Mohammed Al-Jadaan, the Saudi finance minister, in an interview with Bloomberg TV on Tuesday in Davos.
The world’s largest supplier of crude oil, Saudi Arabia, is open to negotiating oil trade settlements in currencies other than the U.S. dollar, according to Mohammed Al-Jadaan, the Saudi finance minister, in an interview with Bloomberg TV on Tuesday in Davos.
Another danger to the U.S. dollar’s existing hegemony in the world’s oil trade may come from the Saudi signal that it may be willing to engage in discussions about oil trading conducted in non-dollar currencies.
“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan told Bloomberg TV.
“I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world,” the Saudi minister added.
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Since the 1970s, the world’s largest oil exporter has priced its crude in U.S. dollars under the petrodollar system, and the Saudi riyal has been tied to the dollar ever since.
However, as the world’s largest importer of crude oil, China, Saudi Arabia is eager to expand its strategic partnership in the oil trade.
During Chinese President Xi Jinping’s visit to the Saudi capital Riyadh last month, China and Saudi Arabia decided to upgrade their relations to a strategic partnership and expand their crude oil trading.