RIYADH: The big story of the week was Reuters reporting that Saudi Arabia was mulling selling its oil in currencies other than the dollar if Washington pushed ahead with legislation exposing OPEC to anti-trust prosecution. The story, which cited unnamed sources, added further drama to a narrative that is hardly in need of any more twists and turns of plot. Before getting too carried away, it is worth reflecting on the absolutely vital role that the Kingdom of Saudi Arabia plays in balancing global oil markets. Saudi Arabia is one of the 20 most powerful economies in the world and that same world depends on it to ensure that the fuel that powers people’s cars and heats their homes is in steady supply. It is hard to imagine a world without the Kingdom playing that vital role.
Changing the pricing mechanism deployed to price oil is not so unusual. After all China, which does not export crude oil but is the world’s largest crude oil importer, has launched its own oil pricing exchange as a clear direction to detach from dollar dominance in pricing crude. The establishment of the Shanghai Energy Exchange was the first step in displacing the dollar in almost 10 percent of the global oil consumption. News Desk
