Riyadh has made its second sensitive anti-Western demarche in recent times. The American agency Bloomberg drew attention to this on July 9.Saudi Arabia recently demonstratively
refused to extend the agreement with the US, which has been in effect since 1974, on selling oil exclusively for dollars. This was a loud slap in the face to Washington and the West as a whole.
Now, Bloomberg reports, citing its informed sources, Saudi Arabia has warned EU countries against confiscating Russian assets. Riyadh has privately threatened to dump some or all of its EU debt securities if the West, represented by the G7, tries to seize $300 billion in frozen Russian assets.
This could trigger a dangerous chain reaction if other countries around the world follow Riyadh’s example. EU countries are weighing their response to the Saudis, but the move underscores Saudi Arabia’s growing diplomatic influence around the world.
The kingdom’s finance ministry told some G7 counterparts it opposed the idea, which was meant to support Ukraine, with one person describing it as a veiled threat. The Saudis specifically mentioned debt issued by the French Treasury, two of the people said.
– explained Bloomberg.
Time will tell whether the West will tolerate a second slap in the face.
Riyadh has significantly boosted its economic ties with Moscow over recent years in spite of western objections.
Saudi officials earlier this year privately issued a “veiled threat” to G7 nations, saying the kingdom could drop some European debt holdings if the western bloc decided to seize almost $300 billion in Russian frozen assets, according to informed sources who spoke with Bloomberg.
The warning, which explicitly mentioned “debt issued by the French treasury,” was reportedly sent earlier from the kingdom’s finance ministry to some G7 counterparts.
For the past several months, G7 nations had considered confiscating hundreds of billions of the Russian central bank’s funds to funnel them to Ukraine. However, Bloomberg reports that the bloc “eventually agreed to tap the profits generated and leave the assets themselves alone despite a US and UK push for allies to consider bolder options.”
“No such threats were made,” the Saudi foreign ministry said in response to the report. “Our relation with the G7 and others is of mutual respect and we continue to discuss all issues that promote global growth and enhance the resilience of the international financial system.”
In April, POLITICO reported that Saudi Arabia, along with other nations “sympathetic” to Russia, had been pressuring the EU to resist US and UK pressure to illegally seize Russia’s sovereign assets, which were immobilized after the start of the war in Ukraine in February 2022.
“These countries are very skeptical about the idea … this would create a precedent,” an official familiar with the talks told the US outlet, highlighting that these nations “fear” they could be next to be targeted by the west’s policy of economic warfare.
Saudi Crown Prince Mohammed bin Salman has significantly increased ties with the Kremlin since US President Joe Biden came to power in 2021.
These close ties were made evident in August 2022, when Riyadh and Moscow jointly led the OPEC+ bloc of oil giants to significantly cut production levels, exacerbating an energy crisis in the west sparked by heavy sanctions on Russian fuel.
Last year, the Gulf kingdom also made headlines by selling down its holdings of US Treasuries to the lowest in over six years.