Saudi Arabia: Warning to Liquidate European Debt if G-7 Attempts to Confiscate Russian Assets

_{Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin. Photo}

Saudi Arabia issued a warning to G7 nations earlier this year, stating it might sell off its European debt holdings if the group moved to seize nearly $300 billion of Russia’s frozen assets, Middle East Monitor reports on July 10th. The cautionary note was reported by Bloomberg. This development underscores the potential financial ripple effects of international sanctions.

The proposed move to support Ukraine was perceived as a veiled threat, highlighting Saudi Arabia’s growing diplomatic influence on the global stage. This specific mention of French treasury debt appears to have swayed European reluctance to back the asset seizure plan as initially conceived. The Saudi Finance Ministry’s opposition reportedly influenced the G7’s decision to target only the profits generated by the frozen assets, rather than seizing them outright.

The reasons for Saudi Arabia’s stance are uncertain. Some speculate that Riyadh acted out of self-interest, fearing a dangerous precedent could be set for future asset seizures. Others suggest it may reflect solidarity with Russia, given the close ties between Riyadh and Moscow since the Ukraine invasion and their joint leadership of the OPEC+ oil cartel.

The incident exemplifies the growing influence of BRICS nations—Brazil, Russia, India, China, and South Africa—over global affairs. Saudi Arabia is contemplating joining this bloc. As these countries gain economic and diplomatic strength, they increasingly challenge and shape global policy decisions traditionally dominated by Western nations.

Saudi Arabia’s stance on Russian assets also highlights a broader trend where issues like the Ukraine conflict become wedge issues between the West and BRICS members. Much like Israel has become a contentious topic, with BRICS nations frequently opposing Western positions, the treatment of Russian assets has emerged as another area of divergence.

The Saudi threat, whether executed or not, underscores the Kingdom’s substantial financial leverage. With net foreign reserves of $445 billion and a sovereign wealth fund nearing $1 trillion in assets, Saudi Arabia’s financial decisions carry significant implications for global markets and geopolitics. This serves as a stark reminder of its influential economic power on the world stage.

Middle East Monitor, Bloomberg and agencies

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