Bloomberg: Saudi Arabia Threatened the G7 Regarding the Seizure of Russian Assets

Bloomberg reported that Saudi Arabia warned the G7 earlier this year that it might sell some of its European bonds if Russian assets were seized. On Tuesday, July 9, Bloomberg cited 'informed sources' stating that the Saudi Ministry of Finance expressed its opposition to the idea of seizing Russian assets during discussions with its G7 counterparts, considering it a threat. These sources added that the Saudis specifically referred to debts issued by the French Treasury. The motivation behind Saudi Arabia's action is unclear. According to Bloomberg, some believe that the country is acting out of fear of setting a precedent for the seizure of other countries' assets in the future, while others think that Saudi Arabia is doing this due to its close ties with Russia and cooperation within OPEC+. In any case, this action reflects Saudi Arabia's increasing influence in global diplomacy and the challenges faced by the G7 industrialized nations in garnering support from non-Western countries for backing Ukraine against Russian aggression. In May and June, the G7 was considering various options regarding the use of funds from the Russian central bank. Ultimately, despite pressure from the U.S. and the U.K. for bolder actions, the group decided to use the profits from these assets while keeping the assets themselves frozen. Some EU member states opposed this idea, expressing concern that it might harm the euro. Informed sources told Bloomberg that 'Saudi Arabia's position likely influenced the reluctance of these countries.' The Saudi Ministry of Finance denied this threat, stating that the country's relations with the G7 are based on mutual respect. Saudi assets in euros and French bonds could amount to tens of billions of euros, but likely would not be large enough to make a significant difference if sold. However, European officials were concerned that other countries might follow Saudi Arabia's lead. A Saudi official stated that 'it is not the style of the government' to make such threats, but added that the Saudi government 'likely explained the ultimate consequences of any seizure of countries' assets to G7 members.' Under the leadership of Crown Prince Mohammed bin Salman, Saudi Arabia is increasingly positioning itself as a diplomatic power and has expressed a desire to mediate between Kyiv and Moscow. The French government did not respond to Bloomberg's request for comment on this matter. After months of discussion, G7 leaders agreed in a June meeting in Italy on a financial structure that would provide approximately $50 billion in new aid to Ukraine. This aid will be funded through loans repaid using profits from nearly €260 billion ($280 billion) in frozen Russian funds. These funds are expected to generate annual revenues of between €3 billion and €5 billion. The G7 and the European Union are finalizing the mechanisms for this plan. Some EU countries hope that this plan will be a step towards doing more with Russian assets, and such requests are likely to increase as the war continues and the costs of rebuilding Ukraine rise. As the war in Ukraine continues, a senior NATO official stated on Tuesday that Russian ammunition and forces are not sufficient to resume a major offensive against Ukraine and need to procure mass weapons from other countries such as Iran.