Saudi Standoff Could Lead To Pricing of Oil in Chinese Yuan Eroding US Dollar Superpower Status!

The current global standoff between Saudi Arabia and the western world due to the presumed death (disappearance?) or missing status of Jamal Khashoggi (Washington Post journalist, Saudi citizen, US Permanent Resident) has all the elements of intrigue and mystery. 

This standoff is linked to pricing of oil in USD versus Yuan, infighting of Saudi elites, 9/11 attack court cases seeking compensation from Saudis, US politics/superpower status, global military sales, multi billion dollar investments, skirmishes with regional powers like Iran/Turkey and many other top most global geo political concerns. 

Major US and UK corporations have pulled out of the Oct 23rd 2018 Saudi conference on the future vision of Saudi. Markets have tumbled, currencies and capital outflows are under pressure. 

It once again, brings us to the very important prediction that we have made for over 3 years that Saudi Arabia will need to price oil in yuan sometime in 2018 (potentially delayed until 2019 because of the Trump-Saudi deal due to which oil rose above our maximum prediction of USD 60 level last year). 

This important decision of historical shift of pricing Saudi oil in yuan will change the lives and future of billions around the world. 

It will create panic, depreciation of asset values in GCC, depeg of currencies, corporate upheaval and many unforeseen events that cannot even be forecasted.

It has almost NEVER been spoken in public by the Saudis or anyone else until TODAY! 

We have predicted that the pricing of oil in yuan will occur in 2018, however, because Trump did a deal with Saudi in 2017, so they arrested several thousand people in Saudi and stripped them of their assets and power. 

Jamal Khashoggi is also an outcome of that ongoing process. 

For the very first time yesterday, Saudis have spoken about pricing oil in yuan in writing and threatened USA that they may price oil in yuan! 

The only global media who has so far published this threat is Washington Post. 

This ties in directly with our opinion for several years that the underlying theme of all problems afflicting the Middle East is the turf war between America and China which is linked through the price of oil and places Saudi pricing oil in USD as the last obstacle in the rise of China and it's currency. 

This places Saudi in the crosshairs of world's new super power - China and the old super power - USA. 

Whatever Saudi and UAE do with regard to oil or VAT etc, they are doomed. If they change oil policy or retain the same, they are doomed. 

If they implement VAT or don't implement VAT they are doomed as well and so on in all their policies. 

The stress is beyond excruciating levels but one day the thread connecting oil and USD exclusively must break which is in 2018 or latest sometime in 2019. 

In a way this a trade war between USA and Saudi since Saudi only has oil and dollars hence those two become the fulcrum of the "trade war".

"If US sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world. Riyadh is the capital of its oil, and touching this would affect oil production before any other vital commodity. It would lead to Saudi Arabia's failure to commit to producing 7.5 million barrels. If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure. 

An oil barrel may be priced in a different currency, Chinese yuan, perhaps, instead of the dollar. And oil is the most important commodity traded by the dollar today." 

OPINION: US sanctions on Riyadh would mean Washington is stabbing itself    

The author of the above article is Turki AlDakhil who is very close to MBS and as we know around GCC that nothing gets written in the media especially which is of such critical importance without the consent of the powers that be. 

This indicates that the threat is serious, credible and is being considered as an option. 

We endorse this view that Saudi must move ahead to sell oil in yuan instead of just USD, plus they don't have much choice anyways as their reserves have depleted to atrocious levels.

There will be short term pain but in the long run it is beneficial for all concerned. 

"After the Saudi government statement was released early Sunday, Turki Aldakhil, the general manager of the Saudi-owned al-Arabiya news network, wrote in a column that “decision-making circles within the kingdom” were considering more than 30 potential measures in response to the threat of sanctions, including pricing oil in Chinese yuan rather than the dollar and allowing Russia to build a military base on Saudi soil." 

Saudi Arabia forcefully rejects ‘threats’ over Khashoggi disappearance as international crisis simmers  

We expect price of oil to rise continually over the next few weeks to levels above USD 100. 

We expect pricing of oil in Chinese yuan in the months ahead. 

We expect more people to be arrested across GCC, more people to leave GCC and more people to take out their cash and assets from GCC. 

We expect sanctions on Saudi officials that will trigger a response from Saudi Arabia which has been outlined above in writing, a bit similar to the 1973 Arab oil embargo on the US. 

We expect business sentiment to worsen and small businesses to keep collapsing and billions will flow out of Saudi and UAE as these massive events keep unravelling over the next several weeks, possibly several months, taking global tensions to unprecedented levels as the sanctions get implemented while negotiations and threats carry on. 

The stakes in this game are very high for all parties concerned whether it is Turkey or Saudi or America or China or Iran. 

We expect dramatic unknown consequences for all concerned in the short term which could crush almost all the SME businesses in GCC and anyone linked to GCC. 

We are unsure how banks will cope with lack of business, rising defaults, depreciation of real estate, high pressure on currencies and default swaps an interest rates, most likely depeg of currencies, impact of sanctions by US etc. 

If Saudi goes the full course to price oil in yuan, this will alter the course of history and will become one of the most important events of the 21st century while handing over the super power status baton from the hands of America into the hands of China, although gradually. 

The announcement to accept yuan for oil will come suddenly and without any warning, except from this blog. 

Consider yourself warned and hedge accordingly!