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June 30, 2022

Arab countries – negotiating the end of dollar dealings for oil

Oil states say no talks on replacing USD.

The Arab countries in the Gulf are negotiating with China, Russia, Japan and France to end dollar dealings for oil, Hotnews reports quoting ‘The Independent.’

The negotiations are aiming at a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

The mentioned sources say finance ministers and central bank governors have had secret talks in Russia, China, Japan and Brazil to work on the scheme.

The result could mean that oil will no longer be priced in USD. Negotiations were confirmed by both Gulf Arab and Chinese banking sources in Hong Kong.

‘The Independent’, quoted by Hotnews, reads that the Americans, aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. The mentioned paper concludes the evolutions sound as a prediction of a future economic war between the US and China over Middle East oil. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated USD 2.1 trillion in dollar reserves, Hotnews informs quoting ‘The Independent.’

WB president Robert Zoellick said in Istanbul, ahead of the IMF and World Bank meetings, that the legacies of the crisis may be recognition of changed economic power relations, while the above mentioned sources consider this as some acknowledgement of the decline of US economic power.

It is also said that the Chinese believe that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the USD. Chinese financial sources, quoted by ‘The Independent’ and Hotnews, say President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the USD in nine years’ time, as the current deadline for the currency transition is 2018. Big oil producing nations denied the British newspaper report, Reuters informs. Top officials of Saudia Arabia and Russia, speaking on the sidelines of International Monetary Fund meetings in Istanbul, denied there were such talks. The two countries are the world’s largest and second-largest oil exporters. Asked by reporters about the newspaper story, Saudi Arabia’s central bank chief Muhammad al-Jasser said: “Absolutely incorrect.” He repeated the same response when asked whether Saudi Arabia was in such talks. Kuwait’s oil minister made similar remarks, while Russia’s deputy finance minister Dmitry Pankin said: “We did not discuss this at all.” Algerian Finance Minister Karim Djoudi told Reuters: “Oil producing countries need to stabilize revenues but…I don’t see a need for oil trade to be denominated differently. “But we are at the IMF conference where all sorts of subjects are raised and discussed,” he added. Gold futures hit a new record high on Tuesday, lifted by dollar weakness after Australia hiked interest rates and after a report that Gulf oil producers, along with China, Russia, Japan and France, are planning to eventually end dollar-based oil pricing.

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