SATISH SHARMA - not just Rotigraphy.: The End of the Pact: Saudi Arabia/USA, Europe's Energy Strangulation, and the Fracture of the Petrodollar

https://x.com/Geopolitik_2030/status/2101167458153381949

HISTORIA Y GEOPOLÍTICA

@Geopolitik_2030

Translated from Spanish

The End of the Pact: Saudi Arabia/USA, Europe's Energy Strangulation, and the Fracture of the Petrodollar

The Saudi suspension of oil shipments to Europe in September and possibly October is no mere logistical hiccup. The drone attack on the East-West pipeline and the suspension in Yanbu expose Europe's energy fragility and, above all, the collapse of the historic pact between Washington and Riyadh: security in exchange for selling oil in dollars. Saudi Arabia discovers that its security bill with the United States was, in reality, a bounced check.

The blow to supply is immediate. Spot cargoes with urgent delivery topped $130 per barrel; North Sea Forties hit $136.75, near its record, and Brent held above $100. Saudi Aramco notified European clients and, per Bloomberg, the decision affects all buyers on the continent. Poland, via Orlen, launched over ten tenders to secure alternative barrels; Spain, which imports around 5% of its crude from Saudi Arabia, is also seeking emergency suppliers. Europe, already battered by the Ukraine-derived crisis, faces an oil strangulation that threatens to worsen inflation and industrial competitiveness. Its energy security now hangs by a 1,200-kilometer pipeline that can be severed by a drone.

But the real trigger isn't the attack—it's Washington's response. For decades, the tacit pact worked: Saudi Arabia sold its oil in dollars and reinvested the surpluses in Treasury bonds; the United States provided security guarantees. That loop has broken. When Mohammed bin Salman called Trump twice in one day to request military support, the reply was frosty: intelligence, but not a single soldier. In Washington's calculus, Saudi security weighs less than its electoral interests and military fatigue. The new doctrine is that regional partners manage their own challenges, which in practice means Riyadh must defend itself alone.

The U.S. refusal to honor its end of the deal has consequences that transcend the military. Saudi Arabia has reevaluated its alliance and concluded that the cost of the partnership outweighs the value of the protection. It refused to grant airspace for an operation aimed at forcibly opening the Strait of Hormuz, forcing the mission to be canceled 36 hours after announcement. The petrodollar system is teetering: it requires dollars earned and invested, and both flows have halted. The Hormuz closure stranded Gulf barrels. Central banks, which had already reduced their Treasury bond holdings to around 32%, have begun selling. Confidence in the dollar as a safe haven erodes just when it's needed most. Riyadh hasn't formally broken with Washington, but it no longer acts as a subordinate ally: it's drawing closer to China and Russia and exploring alternative payment mechanisms. The implicit 1974 contract has been rescinded from within.

The Saudi oil suspension to Europe is, therefore, far more than a supply disruption. It's the visible symptom of a structural crisis in the financial and security order that shaped the world for half a century. Europe pays the most immediate price for its dependence and alignment with Washington. But the long-term cost falls on the United States: without petrodollar reinvestment, its ability to finance twin deficits weakens; without credibility in its security guarantees, its influence in the Gulf fades. Riyadh's message is clear: it no longer accepts paying for protection that doesn't arrive. Washington should understand that the end of the petrodollar isn't a future hypothesis, but a present reality, and that the consequences will be paid sooner or later in its own economy.