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Finance influencers and online forums have been abuzz with this news the past few days but now that it is happened ... looks like nothing changed? Oil prices, t

Finance influencers and online forums have been abuzz with this news the past few days but now that it is happened ... looks like nothing changed? Oil prices, the US dollar and the markets seem stable? Is this one of those events that turn out to have been "much ado about nothing"? I'm not an expert in this area, curious if anyone has more insights into this.

deleted 2y ago
[deleted]
vel0city 2y ago
If this causes major shifts, I don't imagine they'll be apparent on day 1. Its not like Saudi Arabia was eagerly awaiting to burn some major bridges with the US. Check back on day 365, or day 3650.
- rickydroll 2y ago
  I would not be surprised if this became an "October surprise" to weaken Biden and the Democrats further.
  - vel0city 2y ago
    Right? Its a card in the Saudi Royal Family's pocket to be played when it suits them. Not something to just throw down all willy-nilly.
  - bequanna 2y ago
    I don’t follow. By pretty much every measure, Biden appears to be the establishment candidate. Who is out to get him?
    - consumer451 2y ago
      > By pretty much every measure, Biden appears to be the establishment candidate. Who is out to get him? Certainly the fossil fuel establishment, one of the strongest forces on the planet, would always prefer a GOP candidate over a Dem. Other parties out to get Biden are likely corporate lobbying groups as the Dems have been showing some backbone with regard to regulations in recent times.
      - JumpCrisscross 2y ago
        > the fossil fuel establishment, one of the strongest forces on the planet, would always prefer a GOP candidate over a Dem Then Riyadh would prefer Biden. American fossil fuel producers are their competition. (Not claiming knowledge about MBS’s preferences. Just underlining this isn’t as simple as implied.)
        consumer451 2y ago
        Since we repealed the law forbidding oil export, it's a global market. Riyadh and Houston have always been on great terms as they have common goals and common enemies. The Dems propose moving to a green economy, this is terrible for all fossil fuel extractors.
        mrighele 2y ago
        Riyadh would prefer the one willing to sell secrets for a couple of million dollars.
      - coldtea 2y ago
        >Certainly the fossil fuel establishment, one of the strongest forces on the planet, would always prefer a GOP candidate over a Dem. Is this not common knowledge? Yes, since Dems always worked just fine for them too.
        consumer451 2y ago
        Really? "Both sides." > You all are wealthy enough, he (Trump) said, that you should raise $1 billion to return me to the White House. At the dinner, he vowed to immediately reverse dozens of President Biden’s environmental rules and policies and stop new ones from being enacted https://www.washingtonpost.com/politics/2024/05/09/trump-oil-industry-campaign-money/ https://www.washingtonpost.com/politics/2024/05/09/trump-oil...
        coldtea 2y ago
        Consider the source. And the same deals Dems have been making for decades too.
    - b112 2y ago
      As a Canuck, I don't get why the US us trying to elect candidates, older than a pope typically is. Both candidates are ancient. Some want different candidates. On both sides.
      - bdcravens 2y ago
        For the most part, the mechanics of the current bipartisan system. In the current election system of primaries (in place since 1972), an incumbent has never lost. They haven't even lost a state in 44 years. So basically the incumbent has a defacto first right of refusal when it comes to their party's nomination. The other party has been shaped by a political movement with a lot of power and momentum, and the founder of that movement more or less has the same defacto first right of refusal.
        adolph 2y ago
        I think the parent comment is commenting on presidential candidate ages, which has had two consecutive new records in age and incumbency didn't seem to factor. Prompt: list of us presidents and their year of birth and age when elected You will see a list with few year of birth regressions and most ages in 50-60. Two years of 70+ is an outlier.
        bdcravens 2y ago
        Incumbency is why younger options aren't being considered. It's more of an "in spite of" rather than "because of" situation.
      - mejutoco 2y ago
        If we are going to think bigger I suggest more than 2 viable parties.
        jonathankoren 2y ago
        You’re going to have to eliminate first past the post for that to work. Both parties are essentially coallitions. Christian nationalists and big business, and their apologists on one side, and everyone else on the other.
- nonrandomstring 2y ago
  > Its not like Saudi Arabia was eagerly awaiting to burn some major bridges with the US. Bridges aren't typically their target. https://en.wikipedia.org/wiki/Alleged_Saudi_role_in_the_September_11_attacks https://en.wikipedia.org/wiki/Alleged_Saudi_role_in_the_Sept...
  - fshbbdssbbgdd 2y ago
    The allegations here, if I got it right: 1. One guy who worked for Saudi intelligence knew about the attacks (disputed). 2. 15 of 19 attackers were Saudi nationals (dubious relevance, generally we don’t blame a whole country for crimes committed by individuals from that country). 3. Bin Laden family has close ties to the Saudi royal family, and Al Queda got funded by the Bin Laden family. My surface-level takeaway is that Saudi royals deserve criticism for associating with the supporters of terrorism. However, I don’t see evidence the Saudi state conspired to commit the 9/11 attacks.
    - nonrandomstring 2y ago
      Why are you asking me if yoou read it?
      - fshbbdssbbgdd 2y ago
        My feeling is that discussion of this issue includes a lot of people implying things, making vague accusations. I feel it’s useful to get specific about the claims so readers can understand them.
        nonrandomstring 2y ago
        Fair enough. And I'm glad you did, because it turned what was a sardonic throwaway comment by myself - "Oh they like burning skyscrapers not bridges" - into some real reflection, for a few of us, me included, researching and thinking a bit more deeply about it. 9/11 is a turning point in world history. Even today, much of what's going on in the digital world around cybersecurity, digital rights and software design is reverberating from what happened two decades ago. I have people close to me still living with the PTSD. I think for some of the current generation who cannot directly remember it but live in the shadow, it's what WW2 was to mine. For them it's important to keep clarity, and not give in to myths, convenient narratives and conspiracy theories. And that takes constant courage. Looking back at it, it's beyond insane. We waged two theatres of war against completely the wrong countries, killed millions and wrecked our own culture, waged disinformation psyops on our own people to maintain a lie, for what? And despite shooting Bin Laden - which was never a trial or any kind of real justice by our standards of civilisation, I can't help thinking the bad guys just got away with it all. And there they are, still talking about "petrodollars" while the climate fails and the planet burns.
- adventured 2y ago
  The US is now the world's largest energy producer, oil and natural gas. Saudi Arabia's security context is anything but solid. I'd question whether they have much room to play with in terms of messing with the US (maybe at the edges, nothing fundamental). I suppose they could sign a large strategic guarantee with China as a form of diversification of security.
  - JumpCrisscross 2y ago
    > US is now the world's largest energy producer, oil and natural gas And Iran finds itself emboldened by renewed ties to Russia.
- ryandrake 2y ago
  There's that quote, which always seems to get misattributed to a different vaguely-middle-eastern public figure every time it's repeated: "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel." Whether or not anyone actually said it, it seems to be more and more likely as oil verrrry slowly becomes less and less relevant.
  - doctor_eval 2y ago
    I thought you were going to say a different quote, along the lines that: change always takes more time than we expect, and has more impact than we imagine. Having primed myself so, I had to reread the camel quote a few times before I understood it!
    - 0cf8612b2e1e 2y ago
      I too was primed for the Bill Gates (?) quote about change in a year vs a decade.
  - hnbear 2y ago
    Land Rover beats Mercedes?
Glawen 2y ago
These type of event cannot be evaluated just days after. The outcome will be clearer in the coming years. Look at COVID crisis, we are yet to fully understand the consequences of the government monetary actions
- drivebyhooting 2y ago
  Why is this downvoted?
  - JumpCrisscross 2y ago
    It’s misinformed on scale of effects, like saying Apple changing the preferences typeface on iMac is going to have massive effects down the road. Like, sure, maybe. But that’s true of literally anything. It would take some serious changes in the global economy to make this news impactful. At which point we might as well call out the possibility of the Teton Pass collapse influencing the odds of China invading Taiwan.
    - aylmao 2y ago
      I don't think what you say is the case. The petrodollar isn't something minor. The role of both oil and the currency used internationally for trade can hardly be understated in history. It won't lead to much in the short term, that's certain. A boat as big as the global economy doesn't steer quickly. But in the long term it very well could. Or it could not, if the USA makes sure to keep the dollar in the center of world trade in other ways.
      - JumpCrisscross 2y ago
        > petrodollar isn't something minor. The role of both oil and the currency used internationally for trade can hardly be understated in history In history. Not today. Remember, in 1974 the U.S. didn’t trade with China [1], the USSR or the Soviet-aligned world. (We were also a massive energy importer [2].) There is a reason the term petrodollar only shows up in fringe blogs, and never in monetary policy discussions (since at least Greenspan). [1] https://guides.loc.gov/us-trade-with-china https://guides.loc.gov/us-trade-with-china [2] https://en.m.wikipedia.org/wiki/United_States_energy_independence https://en.m.wikipedia.org/wiki/United_States_energy_indepen...
netsharc 2y ago
My thoughts as someone who reads too much news (but probably not enough to be knowledgeable): I could imagine negotiations going on behind closed doors. The USA is still a gorilla with firepower that can be used as leverage. But MBS is an unstable egomaniac who probably doesn't respond well to threats... My guess is China is trying to woo him, although China doesn't seem to do "diplomacy by aircraft carrier", at least not outside its own seas. I wonder if Putin has any influence, at the moment he can only be China's little brother, and besides, he's friends with Iran and S.A. and Iran aren't friends...
A4ET8a8uTh0 2y ago
I guess we have to go back to the basics. Is USD considered a safe haven compared to other currencies/commodities? If yes, nothing will likely change. If no, they might. It is possible that this is one of those few scenarios, where it is a 'good thing' that world is distracted by Ukraine/Russia war and Israel/Palestine; oh and elections. Full disclosure: I asked uncensored llama, but its predictions seemed off to me.
coldtea 2y ago
>but now that it is happened ... looks like nothing changed? Oil prices, the US dollar and the markets seem stable? It's not a falling meteor, it's an trade/agreement/commercial change. The impact of this takes months or even years to fully develop, and cascades with other factors.
jandrewrogers 2y ago
This is a vestige of the 1970s, it isn't particularly relevant in a world where the US is an oil and gas producing juggernaut. The geopolitics of oil are very different than they once were. The conspiracy theories around the petrodollar have always been a bit overwrought. It is no different than China divesting US treasuries. There were people that asserted this would be apocalyptic but there was nothing substantive behind those fears. And then it actually happened and no one noticed.
- elzbardico 2y ago
  Oil is what matters less here. The point is that the ability of the US to refinance its debt and support the massive consumption levels of the American people through cheap imports and massive trade deficits rely on a healthy global demand for the USD. The Us is now a massive producer of oil, but it is not a massive net exporter of it, because it consumes a lot. So, when the big net exporters of oil decide to accept other things in payment in lieu of the USD it inevitably has a depressing effect on the global demand for the dollar.
  - DrFalkyn 2y ago
    Sure they can accept whatever currency they want Which they will then trade for USD and stash in banks or buy stuff from the US
    - elzbardico 2y ago
      If you don't need the USD do buy oil, industrial goods, services and commodities, why would you trade all your surplus for USD? Every billateral trade you do in another currency other than the US, means your demand for dollars has decreased.
  - JumpCrisscross 2y ago
    > it is not a massive net exporter of it, because it consumes a lot Wrong [1]. We are the world's largest producer and 4th-largest exporter, halfway to Saudi Arabia and three quarters to Russia. [1] https://en.wikipedia.org/wiki/List_of_countries_by_oil_exports https://en.wikipedia.org/wiki/List_of_countries_by_oil_expor...
cjensen 2y ago
Saudi Arabia lives in the same trap China does with respect to the dollar: they own so much dollar-denominated wealth that they have no interest in intentionally destroying the dollar. They may sensibly diversify going forward, but diversification is a long way from the kind of everything-must-go selloff of dollar assets that would be required to harm the value of the dollar.
aylmao 2y ago
Brexit is one of the biggest "shock" events to have happened in recent history, but little really changed in the short term for Britain. An average brit who wasn't in the import/export business probably didn't notice anything the day of, or the day after Brexit. It's been slow, and one can argue, visible now in the long term "in the graphs". Recovery from COVID was slow. There's a creeping cost-of-living crisis, productivity has been stagnant, investment low, etc. Some might attribute this at least in part to Brexit, some may not, but the truth is, wether Brexit played a role or not, this is how it would surface— slowly, and in the charts.
- ben_w 2y ago
  Brexit also had a 10% shift in currency value as soon as the markets could react to the news. I don't know how big a deal this news is on the markets, especially given everyone's already trying to shift to renewables. And it might have been predicted in advance, unlike Brexit where the markets expected Remain.
  - aylmao 2y ago
    I think Brexit was also more obvious. The effects and timelines were more clear, there were stronger, and well-publicized opinions, and so it was easier to predict what would happen and hedge accordingly. This time of predictability also creates a self-fulfilling prophecy environment. Having people bet against makes things harder. These news on the other hand seem more abstract. There's no deal now, but the Saudis could change little in the way they do business. They could also change a lot. Other players have cards in the game too— China could start pushing a petroyuan, it could be well-received, or maybe not. There's a lot of actors in the world trade of oil, and the global use of the dollar— plus the latter depends on much more than just oil trade. With so many questions in the air, I'm not surprised nobody is making strong bets on what will happen. And perhaps this even leads to little happening in the short term. I guess time will tell.
    - mensetmanusman 2y ago
      China has too many negative trends to be a safe bet.
dragonelite 2y ago
For the US not much will change in the short or medium term because the pact was about exclusive dollar payment for energy deal. But this will open up the road for Saudis and OPEC to speed up dedollarisation and diverse their currency reserves(ruble, dollar and Yuan), they already made the steps by accepting Yuan some year ago. Russian Central back also today announced that Yuan will be the main foreign trade currency instead of the Euro and dollar. That pretty much means China has free flow access to energy, food and maybe weapons/shells if needed for a war.
ur-whale 2y ago
> much ado about nothing Did you seriously expect this to have an impact over a timespan weeks ? Geopolitical stuff, with some exceptions, tends to unravel over years or decades. This is a sizable event, and it will likely have quite an impact, but unless they renegotiate it , it's going to be a decades long thing.

deleted 2y ago

[deleted]

vel0city 2y ago

If this causes major shifts, I don't imagine they'll be apparent on day 1. Its not like Saudi Arabia was eagerly awaiting to burn some major bridges with the US. Check back on day 365, or day 3650.

rickydroll 2y ago
I would not be surprised if this became an "October surprise" to weaken Biden and the Democrats further.
- vel0city 2y ago
  Right? Its a card in the Saudi Royal Family's pocket to be played when it suits them. Not something to just throw down all willy-nilly.
- bequanna 2y ago
  I don’t follow. By pretty much every measure, Biden appears to be the establishment candidate. Who is out to get him?
  - consumer451 2y ago
    > By pretty much every measure, Biden appears to be the establishment candidate. Who is out to get him? Certainly the fossil fuel establishment, one of the strongest forces on the planet, would always prefer a GOP candidate over a Dem. Other parties out to get Biden are likely corporate lobbying groups as the Dems have been showing some backbone with regard to regulations in recent times.
    - JumpCrisscross 2y ago
      > the fossil fuel establishment, one of the strongest forces on the planet, would always prefer a GOP candidate over a Dem Then Riyadh would prefer Biden. American fossil fuel producers are their competition. (Not claiming knowledge about MBS’s preferences. Just underlining this isn’t as simple as implied.)
      - consumer451 2y ago
        Since we repealed the law forbidding oil export, it's a global market. Riyadh and Houston have always been on great terms as they have common goals and common enemies. The Dems propose moving to a green economy, this is terrible for all fossil fuel extractors.
      - mrighele 2y ago
        Riyadh would prefer the one willing to sell secrets for a couple of million dollars.
    - coldtea 2y ago
      >Certainly the fossil fuel establishment, one of the strongest forces on the planet, would always prefer a GOP candidate over a Dem. Is this not common knowledge? Yes, since Dems always worked just fine for them too.
      - consumer451 2y ago
        Really? "Both sides." > You all are wealthy enough, he (Trump) said, that you should raise $1 billion to return me to the White House. At the dinner, he vowed to immediately reverse dozens of President Biden’s environmental rules and policies and stop new ones from being enacted https://www.washingtonpost.com/politics/2024/05/09/trump-oil-industry-campaign-money/ https://www.washingtonpost.com/politics/2024/05/09/trump-oil...
        coldtea 2y ago
        Consider the source. And the same deals Dems have been making for decades too.
  - b112 2y ago
    As a Canuck, I don't get why the US us trying to elect candidates, older than a pope typically is. Both candidates are ancient. Some want different candidates. On both sides.
    - bdcravens 2y ago
      For the most part, the mechanics of the current bipartisan system. In the current election system of primaries (in place since 1972), an incumbent has never lost. They haven't even lost a state in 44 years. So basically the incumbent has a defacto first right of refusal when it comes to their party's nomination. The other party has been shaped by a political movement with a lot of power and momentum, and the founder of that movement more or less has the same defacto first right of refusal.
      - adolph 2y ago
        I think the parent comment is commenting on presidential candidate ages, which has had two consecutive new records in age and incumbency didn't seem to factor. Prompt: list of us presidents and their year of birth and age when elected You will see a list with few year of birth regressions and most ages in 50-60. Two years of 70+ is an outlier.
        bdcravens 2y ago
        Incumbency is why younger options aren't being considered. It's more of an "in spite of" rather than "because of" situation.
    - mejutoco 2y ago
      If we are going to think bigger I suggest more than 2 viable parties.
      - jonathankoren 2y ago
        You’re going to have to eliminate first past the post for that to work. Both parties are essentially coallitions. Christian nationalists and big business, and their apologists on one side, and everyone else on the other.
nonrandomstring 2y ago
> Its not like Saudi Arabia was eagerly awaiting to burn some major bridges with the US. Bridges aren't typically their target. https://en.wikipedia.org/wiki/Alleged_Saudi_role_in_the_September_11_attacks https://en.wikipedia.org/wiki/Alleged_Saudi_role_in_the_Sept...
- fshbbdssbbgdd 2y ago
  The allegations here, if I got it right: 1. One guy who worked for Saudi intelligence knew about the attacks (disputed). 2. 15 of 19 attackers were Saudi nationals (dubious relevance, generally we don’t blame a whole country for crimes committed by individuals from that country). 3. Bin Laden family has close ties to the Saudi royal family, and Al Queda got funded by the Bin Laden family. My surface-level takeaway is that Saudi royals deserve criticism for associating with the supporters of terrorism. However, I don’t see evidence the Saudi state conspired to commit the 9/11 attacks.
  - nonrandomstring 2y ago
    Why are you asking me if yoou read it?
    - fshbbdssbbgdd 2y ago
      My feeling is that discussion of this issue includes a lot of people implying things, making vague accusations. I feel it’s useful to get specific about the claims so readers can understand them.
      - nonrandomstring 2y ago
        Fair enough. And I'm glad you did, because it turned what was a sardonic throwaway comment by myself - "Oh they like burning skyscrapers not bridges" - into some real reflection, for a few of us, me included, researching and thinking a bit more deeply about it. 9/11 is a turning point in world history. Even today, much of what's going on in the digital world around cybersecurity, digital rights and software design is reverberating from what happened two decades ago. I have people close to me still living with the PTSD. I think for some of the current generation who cannot directly remember it but live in the shadow, it's what WW2 was to mine. For them it's important to keep clarity, and not give in to myths, convenient narratives and conspiracy theories. And that takes constant courage. Looking back at it, it's beyond insane. We waged two theatres of war against completely the wrong countries, killed millions and wrecked our own culture, waged disinformation psyops on our own people to maintain a lie, for what? And despite shooting Bin Laden - which was never a trial or any kind of real justice by our standards of civilisation, I can't help thinking the bad guys just got away with it all. And there they are, still talking about "petrodollars" while the climate fails and the planet burns.
adventured 2y ago
The US is now the world's largest energy producer, oil and natural gas. Saudi Arabia's security context is anything but solid. I'd question whether they have much room to play with in terms of messing with the US (maybe at the edges, nothing fundamental). I suppose they could sign a large strategic guarantee with China as a form of diversification of security.
- JumpCrisscross 2y ago
  > US is now the world's largest energy producer, oil and natural gas And Iran finds itself emboldened by renewed ties to Russia.
ryandrake 2y ago
There's that quote, which always seems to get misattributed to a different vaguely-middle-eastern public figure every time it's repeated: "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel." Whether or not anyone actually said it, it seems to be more and more likely as oil verrrry slowly becomes less and less relevant.
- doctor_eval 2y ago
  I thought you were going to say a different quote, along the lines that: change always takes more time than we expect, and has more impact than we imagine. Having primed myself so, I had to reread the camel quote a few times before I understood it!
  - 0cf8612b2e1e 2y ago
    I too was primed for the Bill Gates (?) quote about change in a year vs a decade.
- hnbear 2y ago
  Land Rover beats Mercedes?

Glawen 2y ago

These type of event cannot be evaluated just days after. The outcome will be clearer in the coming years. Look at COVID crisis, we are yet to fully understand the consequences of the government monetary actions

drivebyhooting 2y ago
Why is this downvoted?
- JumpCrisscross 2y ago
  It’s misinformed on scale of effects, like saying Apple changing the preferences typeface on iMac is going to have massive effects down the road. Like, sure, maybe. But that’s true of literally anything. It would take some serious changes in the global economy to make this news impactful. At which point we might as well call out the possibility of the Teton Pass collapse influencing the odds of China invading Taiwan.
  - aylmao 2y ago
    I don't think what you say is the case. The petrodollar isn't something minor. The role of both oil and the currency used internationally for trade can hardly be understated in history. It won't lead to much in the short term, that's certain. A boat as big as the global economy doesn't steer quickly. But in the long term it very well could. Or it could not, if the USA makes sure to keep the dollar in the center of world trade in other ways.
    - JumpCrisscross 2y ago
      > petrodollar isn't something minor. The role of both oil and the currency used internationally for trade can hardly be understated in history In history. Not today. Remember, in 1974 the U.S. didn’t trade with China [1], the USSR or the Soviet-aligned world. (We were also a massive energy importer [2].) There is a reason the term petrodollar only shows up in fringe blogs, and never in monetary policy discussions (since at least Greenspan). [1] https://guides.loc.gov/us-trade-with-china https://guides.loc.gov/us-trade-with-china [2] https://en.m.wikipedia.org/wiki/United_States_energy_independence https://en.m.wikipedia.org/wiki/United_States_energy_indepen...

netsharc 2y ago

My thoughts as someone who reads too much news (but probably not enough to be knowledgeable): I could imagine negotiations going on behind closed doors. The USA is still a gorilla with firepower that can be used as leverage. But MBS is an unstable egomaniac who probably doesn't respond well to threats... My guess is China is trying to woo him, although China doesn't seem to do "diplomacy by aircraft carrier", at least not outside its own seas. I wonder if Putin has any influence, at the moment he can only be China's little brother, and besides, he's friends with Iran and S.A. and Iran aren't friends...

A4ET8a8uTh0 2y ago

I guess we have to go back to the basics. Is USD considered a safe haven compared to other currencies/commodities? If yes, nothing will likely change. If no, they might. It is possible that this is one of those few scenarios, where it is a 'good thing' that world is distracted by Ukraine/Russia war and Israel/Palestine; oh and elections. Full disclosure: I asked uncensored llama, but its predictions seemed off to me.

coldtea 2y ago

>but now that it is happened ... looks like nothing changed? Oil prices, the US dollar and the markets seem stable? It's not a falling meteor, it's an trade/agreement/commercial change. The impact of this takes months or even years to fully develop, and cascades with other factors.

jandrewrogers 2y ago

This is a vestige of the 1970s, it isn't particularly relevant in a world where the US is an oil and gas producing juggernaut. The geopolitics of oil are very different than they once were. The conspiracy theories around the petrodollar have always been a bit overwrought. It is no different than China divesting US treasuries. There were people that asserted this would be apocalyptic but there was nothing substantive behind those fears. And then it actually happened and no one noticed.

elzbardico 2y ago
Oil is what matters less here. The point is that the ability of the US to refinance its debt and support the massive consumption levels of the American people through cheap imports and massive trade deficits rely on a healthy global demand for the USD. The Us is now a massive producer of oil, but it is not a massive net exporter of it, because it consumes a lot. So, when the big net exporters of oil decide to accept other things in payment in lieu of the USD it inevitably has a depressing effect on the global demand for the dollar.
- DrFalkyn 2y ago
  Sure they can accept whatever currency they want Which they will then trade for USD and stash in banks or buy stuff from the US
  - elzbardico 2y ago
    If you don't need the USD do buy oil, industrial goods, services and commodities, why would you trade all your surplus for USD? Every billateral trade you do in another currency other than the US, means your demand for dollars has decreased.
- JumpCrisscross 2y ago
  > it is not a massive net exporter of it, because it consumes a lot Wrong [1]. We are the world's largest producer and 4th-largest exporter, halfway to Saudi Arabia and three quarters to Russia. [1] https://en.wikipedia.org/wiki/List_of_countries_by_oil_exports https://en.wikipedia.org/wiki/List_of_countries_by_oil_expor...

cjensen 2y ago

Saudi Arabia lives in the same trap China does with respect to the dollar: they own so much dollar-denominated wealth that they have no interest in intentionally destroying the dollar. They may sensibly diversify going forward, but diversification is a long way from the kind of everything-must-go selloff of dollar assets that would be required to harm the value of the dollar.

aylmao 2y ago

Brexit is one of the biggest "shock" events to have happened in recent history, but little really changed in the short term for Britain. An average brit who wasn't in the import/export business probably didn't notice anything the day of, or the day after Brexit. It's been slow, and one can argue, visible now in the long term "in the graphs". Recovery from COVID was slow. There's a creeping cost-of-living crisis, productivity has been stagnant, investment low, etc. Some might attribute this at least in part to Brexit, some may not, but the truth is, wether Brexit played a role or not, this is how it would surface— slowly, and in the charts.

ben_w 2y ago
Brexit also had a 10% shift in currency value as soon as the markets could react to the news. I don't know how big a deal this news is on the markets, especially given everyone's already trying to shift to renewables. And it might have been predicted in advance, unlike Brexit where the markets expected Remain.
- aylmao 2y ago
  I think Brexit was also more obvious. The effects and timelines were more clear, there were stronger, and well-publicized opinions, and so it was easier to predict what would happen and hedge accordingly. This time of predictability also creates a self-fulfilling prophecy environment. Having people bet against makes things harder. These news on the other hand seem more abstract. There's no deal now, but the Saudis could change little in the way they do business. They could also change a lot. Other players have cards in the game too— China could start pushing a petroyuan, it could be well-received, or maybe not. There's a lot of actors in the world trade of oil, and the global use of the dollar— plus the latter depends on much more than just oil trade. With so many questions in the air, I'm not surprised nobody is making strong bets on what will happen. And perhaps this even leads to little happening in the short term. I guess time will tell.
  - mensetmanusman 2y ago
    China has too many negative trends to be a safe bet.

dragonelite 2y ago

For the US not much will change in the short or medium term because the pact was about exclusive dollar payment for energy deal. But this will open up the road for Saudis and OPEC to speed up dedollarisation and diverse their currency reserves(ruble, dollar and Yuan), they already made the steps by accepting Yuan some year ago. Russian Central back also today announced that Yuan will be the main foreign trade currency instead of the Euro and dollar. That pretty much means China has free flow access to energy, food and maybe weapons/shells if needed for a war.

ur-whale 2y ago

> much ado about nothing Did you seriously expect this to have an impact over a timespan weeks ? Geopolitical stuff, with some exceptions, tends to unravel over years or decades. This is a sizable event, and it will likely have quite an impact, but unless they renegotiate it , it's going to be a decades long thing.