Earlier this month, former NY Fed repo guru Zoltan Pozsar wrote one of his most important reports of 2022, in which he described how Putin could unleash hell on the Western financial system by demanding that instead of dollars, Russian oil exporters are paid in gold, effectively pegging oil to gold and launching Petrogold.
Then, China’s President Xi visit with Saudi and GCC leaders marked the birth of the petroyuan and a leap in China’s growing encumbrance of OPEC+’s oil and gas reserves: that’s because with the China-GCC Summit, “China can now claim to have built a ‘special relationship’ not only with the ‘+’ sign in OPEC+ (Russia), but with Iran and all of OPEC+.”
At the time, Zoltan urged the reader to think of the timing of this statement in a diplomatic sense:
“President Xi communicated his message on “renminbi invoicing” not during the first day of his visit – when he met only the Saudi leadership – but during the second day of his visit – when he met the leadership of all the GCC countries – to signal the following:
GCC oil flowing East + renminbi invoicing = the dawn of the petroyuan.”
And now, according to Bloomberg, Saudi Arabia is open to discussions about trade in currencies other than the US dollar, according to the kingdom’s finance minister.
“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,” Mohammed Al-Jadaan told Bloomberg TV on Tuesday in an interview in Davos.
“I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world,” Al-Jadaan said.
And echoing Poszar’s comments above, Al-Jadaan appeared to confirm The Kingdom’s goal seeking to strengthen its relationship with crucial trade partners, most notably China:
“We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries who are willing and able to work with us,” Al-Jadaan said.
Saudi Arabia is also working with multilateral institutions to provide support to Pakistan, Turkey and Egypt, as part of the kingdom’s largesse to nations it deems “vulnerable,” Al-Jadaan said.
“We are providing even oil and derivatives to support their energy needs,” Al Jadaan said.
“So there is a lot of efforts, but we wanted this to be conducted.”