Thread by @suda712

Recent events suggest changing geopolitical environment.

America has no permanent friends or enemies, only interests. — Kissinger

This kissiger statement is not applicable to america only which can be seen in recent events.

#SaudiArabia
#China
#fed
#USA #America

1) 🇸🇦 Saudi Arabia enters trade alliance with China, Russia, Pakistan, and four Central Asian nations to step further away from reliance on the US dollar.
2) Association of Southeast Asian Nations considers dropping the US dollar, euro, yen, and British pound for local #Dollar

3) 🇨🇳 China and France complete first LNG gas trade using Chinese Yuan.

4) 🇨🇳 China and Brazil to settle trades in their own currencies.

5) (BRICS) looking for new currency.

6) 🇰🇪 Kenya signs deal with Saudi Arabia and UAE to buy oil with own currency.
#kenya
#Dollar #Fed

To understand fully the recent events in context of De-dollarization,

First understand the oil and gas market and Petrodollar.

On how the oil market is key to dominating the global currency and its connection with recent events.
#oilandgas #shalegas #American #Petrol #Dollar

The global oil market size is $2.7 trillion 2022 and it is expected to grow to $3 trillion 2023.
And further to grow to $4 trillion by 2030.
And OPEC(organisation for petroleum exporting Countries) is a major supplier of oil in global market, roughly around 35-40%.#Petrol

And some of its powerful members of OPEC are Saudi Arabia, iran, UAE, Iraq, and Kuwait.
And There are non-OPEC countries but produce and supply significant oil in the global market.
And some of the significant names are-
USA,
RUSSIA,
🇨🇦 #USA #Canada #SaudiArabia #Russia

Thanks to the US-SAUDI economic cooperation.

As per the deal,
Saudi Arabia agreed to price its oil exports in the USD and to invest its dollars in US financial assets.

In return, Saudi gets full US technology for drilling , military support.
#SaudiArabia #USA #oilandgas

This agreement is also called a petrodollar agreement, and it helped to cement the US dollar's dominant position in the global oil market.

Later many other middle east countries also joined in receiving USD for oil and made petrodollar a king.
#petrodollar #USA #kuwait #Dollar

And that made the US a privileged country where the US can easily manage its finance and deficit by simply issuing bonds or printing more USD.
Although in the general case, issuing more bonds leads to an increase in debt for the government.
& printing more USD leads to inflation

But the USA is immune to these because any mismanagement of debt or crisis can be financed by issuing more bonds or printing more.

In general Oil Price is a function of demand, supply and geopolitics.

As many countries grow into industrial nations oil demand increases.#Dollar

Here are the 5 oil-consuming countries in the world by percentage of global oil consumption.

United States - 18.8%
China - 14.5%
India - 5.1%
Japan - 3.8%
Russia - 3.8%.
#USA #China #India #Japan #Russia #RussiaUkraineWar

Fast forward to current events-

Sanction hit Russia was looking for a way out, and China is also looking to reduce its dependency on the dollar.
So RUSSIA and CHINA strike a deal to do all trade settlements in their respective currencies.
So China will get oil in yuan.
#Russia

Two of the largest oil importer China and India now doing oil settlements in a non-dollar currency.

As a result, OPEC country's share in global oil export was decreasing. #Russia #China #SaudiArabia #USA #Dollar #petrodollar

As a result that Saudi which is a major player in OPEC and a significant oil supplier.

China strikes deal with Saudi. Saudi also agreed in 2023 about settling oil export in non-dollar currency. Thereby breaking the 1974 petrodollar agreement #Dollar

In short relation between Saudi and the US deteriorated over time repeated requests by USA to Saudi Arabia to increase its oil output in an effort to lower global oil prices.Simply put, Saudi-American ties have reached their lowest point since the Arab oil embargo crisis of 1973.

Saudi is planning to request to join BRICS and SCO where Russia can provide military technology to Saudi also it can have direct dialogue with two of the most oil importers India and china and can get hardware from china and software technology from india . #Russia #SaudiArabia

China to increse its global clout bring iran and saudi closer .
Since Iran is also hit by the US sanction and significant contributor to OPEC but Saudi and Iran are old rivalries to each other.
So China breaks the deal and bring Saudi and Iran together to form a partnership.

And just this week, China made deal with Another BRICS country after RUSSIA,( Saudi and Iran) is BRAZIL.

Brazil and China agreed to settle trades in their respective local currencies, ditching the U.S. dollar.#Dollar #Brazil #Russia

1)🇨🇳 China and Brazil to settle trades in their own currencies, ditching the US dollar.
2)Brazil, Russia, India, China, and South Africa (BRICS) are developing a new currency.
3) 🇨🇳 Chinese yuan surpasses the euro to become Brazil's second-largest currency in foreign reserves.

Last week Saudi takes steps to join the SCO, which is led by China. and hours after the announcements and Saudi entered a trade alliance with China, Russia, Pakistan, and 4 Central Asian nations to decrease their reliance on the U.S. dollar.