The country’s finance minister said on Tuesday that Saudi Arabia may examine trading in currencies other than the US dollar, one of the strongest indications yet that the oil-rich kingdom is open to diversifying away from the currency. Whether it is in the US dollar, the euro, or the Saudi riyal, addressing how we pay our trade agreements is not a problem, the kingdom’s finance minister, Mohammed al-Jadaan, said in an interview with Bloomberg TV on Tuesday in Davos, Switzerland.
Jadaan’s remarks will probably lead to rumors regarding Riyadh’s readiness to carry out oil sales in Chinese yuan. Chinese President Xi Jinping informed Arab leaders during a visit to the Gulf in December that Beijing would push for the purchase of oil and gas in yuan as it seeks to position its currency for use in international commerce.
Like other Gulf nations, Saudi Arabia has long tied its currency to the US dollar. The price of oil is expressed in US dollars worldwide. More than a quarter of Saudi Arabia’s oil exports go to China. A “petroyuan” would threaten the dollar’s position as the world’s reserve currency if the kingdom adopted it. We want to strengthen our strategic ties with Europe and other nations that are ready and able to cooperate with us, Jadaan added. “We have a highly strategic connection with China and we enjoy that same strategic relationship with other nations, including the US.”
Separately, Jadaan said that the monarchy will continue to help nations like Pakistan, Egypt, and Turkey. While much of the globe braces for a recession, Gulf nations are enjoying a windfall from fossil fuels as the conflict in Ukraine raises energy costs. Saudi Arabia reported its first yearly budget surplus in over ten years on Wednesday.