This would lead to further devaluation of the dollar perhaps causing oil to be priced in a more stable currency. There is a case for this having already happened. OPEC recently justified higher prices in nominal $ terms by pointing to a declining dollar having led to an erosion of their revenues when measured in purchasing power terms (yeah and I doubt they are using an hedonically adjusted CPI - they probably look at the cost of their extended London and Switzerland vacations when they're escaping the hot Saudi summer <gg>). I'm led to believe that actually switching the pricing currency for oil nominally would be quite a longwinded process but since they're already making adjustments such a change would be more of psychological nature. IMHO the more important element here is their choice of reserve currency - haven't looked up their "market share" but I'd think a possible move away from the $ may hurt US bonds thoroughly.
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