Saudi Prince MBS has indicated a willingness to shift away from the U.S. dollar hegemony in global trade and finance.
The latest announcement from major oil producers to cut oil production in 2023 further highlights this trend.
On April 2, several OPEC members and other major oil-producing countries such as Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Oman, and Algeria announced their plans to cut oil production in May, reducing production by 1.15 million barrels of oil per day.
However, the White House responded by stating that reducing production is not advisable, and this decision could lead to significant political ramifications, adding to Riyadh’s already significant tensions with Washington.
According to a Wall Street Journal report, Saudi Arabia’s crown prince Mohammed bin Salman has told associates that Riyadh is no longer interested in pleasing the United States.
The relationship between the U.S. and Saudi Arabia has been strained for some time now. Saudi Arabia’s refusal to increase oil production as requested by the U.S. led to tensions between the two nations. The Saudi government officials reportedly mocked President Joe Biden’s mental acuity, calling him “Sleepy Joe,” and his decision to offer a pandemic-inspired fist bump instead of shaking hands with the crown prince during a meeting was also ridiculed.
While Saudi Arabia is not interested in pleasing the U.S. these days, the kingdom’s relationship with China has grown stronger. Saudi Arabia’s finance minister, Mohammed Al-Jadaan, recently announced that the kingdom is open to trading in currencies other than the U.S. dollar, ending its 48-year relationship solely with the greenback.
This shift away from the U.S. dollar hegemony in global trade and finance has been a growing trend for some time now. Many analysts and economists have stressed that the U.S. dollar has been propped up by the petrodollar scheme since 1944. With countries like Saudi Arabia and other major oil-producing nations shifting their focus away from the U.S. dollar, the greenback’s superiority is taking a back seat, and many officials abroad seem to be less concerned about what the U.S. thinks these days.
Saudi
In conclusion, the recent decision by major oil producers to cut oil production highlights the growing shift away from the U.S. dollar hegemony in global trade and finance. While the U.S. government’s exceptionalism that inspired the 2004 comedy “Team America: World Police” seems to be fading faster than ever before, the relationship between the U.S. and its allies and partners will continue to evolve. It remains to be seen how this shift away from the U.S. dollar will impact the global economy and the geopolitical landscape in the years to come.