RIYADH: The UAE and Saudi Arabia’s energy ministers reaffirmed commitments to oil trading in the US dollar following speculation Saudi Arabia would trade in a different currency amid pending US legislation to hinder Opec.
“The trading in the US dollar is something that you don’t change overnight,” UAE Minister of Energy and Industry Suhail Al Mazrouei said on the sidelines of the Middle East Petroleum & Gas Conference (MPGC) in Dubai. “I think that [has been] a norm in the industry for years and years so let’s not jump into some of those ideas … Opec did not claim that they will change the currency in trading.”
The energy ministry said that Saudi Arabia would not risk its key policy priority - to be a stabilising force for global energy markets – by implementing a fundamental change to the financial terms of oil trading in its relationships around the world.
"The kingdom has been trading its oil in dollars for decades, which has served the objectives of its financial and monetary policies well,” the statement said.
According to an earlier Reuters report, Saudi Arabian sources warned that the kingdom may start selling its oil in currencies other than the US dollar if Washington passes a bill exposing Opec members to US anti-trust lawsuits.
The report said that the option had been discussed internally by senior Saudi energy officials in recent months and the plan had even been discussed with Opec members and communicated to senior US energy officials.
While the chances of the US bill known as "Nopec" coming into force are slim and Saudi Arabia would be unlikely to change its oil trading currency, the fact that Riyadh was considering such a drastic step was taken as a sign of the kingdom’s annoyance about potential US legal challenges to Opec.