Saudi Arabia on Monday denied a report that the kingdom is threatening to sell its oil in currencies other than the U.S. dollar if American lawmakers pass legislation targeting OPEC.
Reuters reported last week that the Saudis had raised the issuewithin OPEC and with U.S. officials. Most crude oil is traded in U.S. dollars, and selling crude in other currencies could chip away at the greenback’s dominant role in the international financial system.
On Monday, the kingdom called the report inaccurate, saying it does “not reflect Saudi Arabia’s position on this matter.”
“The Kingdom has been trading its oil in dollars for decades which has served well the objectives of its financial and monetary policies,” the Ministry of Energy, Industry and Mineral Resources said in a statement.
According to Reuters, the plan to marginalize the dollar in oil trading was a response to potential passage of the bipartisan No Oil Producing and Exporting Cartels Act in Congress. The so-called NOPEC legislation would enable the Justice Department to sue OPEC for coordinating production.
The 14-nation producer group helps to drain oversupply from the oil market and boost crude prices by cutting output. The group is currently partnering with Russia and other nonmember oil producers to keep 1.2 million barrels per day off the market.
The Saudi Energy Ministry on Monday suggested that targeting the dollar could disrupt OPEC’s objectives.
“Furthermore, the Ministry reaffirms the Kingdom’s commitment to its role as a stabilizing force of energy markets, and its desire not to risk such a key policy priority through a fundamental change to the financial terms of oil trading relationships around the world,” it said.