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OK, here is the oil deal – with more reality.
Developments to dethrone petrodollar already underway – experts
Saudi Arabia has joined digital currency system mBridge as a participant along with the central banks of Thailand, Hong Kong, China and the United Arab Emirates (UAE) for instant cross border payments.
OK, that is accurate of course.Meanwhile, Riyadh is rumored to have not extended the “petrodollar deal” with the US. The developments send a strong signal to the petrodollar, Sputnik’s pundits say.
Look at “petrodollar deal” in scare quotes …
“These two significant developments serve one strategic purpose which is granting Saudi Arabia flexibility in its future dollar-based oil trade transactions,” Dr Mamdouh G. Salameh, an international oil economist and a global energy expert, tells Sputnik.
The “petrodollar deal” under which Saudi Arabia (and later other OPEC members) agreed to sell oil exclusively in dollars was struck in 1974, several years after the Nixon administration ended the US dollar’s convertibility to gold. As a result, the greenback became “pegged” to oil. If Riyadh withdraws from this arrangement, other Arab countries will most likely follow suit, according to Salameh.
Did you know that the dollar is pegged to oil?
Saudi Arabia joining the mBridge wholesales instant payment platform will facilitate the de-dollarization of oil trade, according to Faisal Alshammeri, political analyst and a columnist for Makkah NewsPaper and Arab News.
OK, that is accurate of course.“Saudi Arabia will accept payments for its oil in non-dollar currencies,” Alshammeri tells Sputnik. “This will encourage more countries to trade among themselves without using the dollars. America had to accept this new economic fact.”
The pundit noted that Saudi Arabia is guided by pragmatism in the first place, as negative economic developments in the US harm businesses all over the globe and undermine consumers’ trust in the dollar.
OK, so here is what is important and what we should retain for future … Now, the dollar is pegged to oil. Once the Saudi’s join mBridge, the dollar price is not pegged to oil any longer. The agreement that they speak about, did not determine price or anything, but determined the fact of a peg. I would hate to see that transaction as it probably is worse than the gold fix. Saudi now can accept the currency and the price that they agree for selling oil, and that will cycle through, so that oil becomes a non-controlled commodity but a market based commodity. Good or Bad? I cannot at the moment think of that .. but must check with the Col, and also another friend that knows these things.
