Economist Steve Hanke said Saudi Crown Prince Mohammed bin Salman forced President Donald Trump to abandon planned strikes on Iran by threatening to unload the kingdom’s U.S. Treasury holdings.
Hanke Claims Saudi Threat Changed Trump’s Course
“I spoke with Mario Nawfal about reports that the Saudi Crown Prince Mohammed bin Salman FORCED Trump to BACK OFF,” Hanke wrote on X, calling a potential bond sale “a credible threat.”
A professor of applied economics and co-director of Johns Hopkins research institute, Hanke said U.S. attacks could have triggered Iranian retaliation against Saudi Aramco and worsened an energy shock. “If Trump had proceeded with what would have probably been war crimes, Iran would have COUNTERATTACKED,” he said. “The counterattack could have crippled Aramco and thrown global energy markets into chaos.”
The Strait of Hormuz blockade has disrupted a waterway that handled about one-fifth of global oil and liquefied natural gas supplies before the war. Aramco CEO Amin Nasser has warned that the disruption could delay the energy market’s recovery until 2027.
The White House did not immediately respond to Benzinga’s request for comment.
Hanke also called America’s bond market “fragile,” echoing his earlier warnings about U.S. debt and “bond vigilantes.” He said Mohammed bin Salman understood Saudi Arabia had “enormous leverage,” adding, “TRUMP RECEIVED MBS’S MESSAGE LOUD AND CLEAR.”
Reports Confirm Pressure But Not Treasury Threat
A Reuters report on Sunday confirmed Saudi pressure for de-escalation, but did not report a Treasury threat. Reuters said the crown prince stressed the “necessity of prioritizing dialogue to de-escalate tensions.” The Associated Press reported that he warned further attacks could provoke retaliation against Gulf allies and severely damage the global economy.
Trump then canceled what he described as a “massive” strike and allowed more time for negotiations over Iran’s nuclear program and reopening the Strait of Hormuz. Trump’s announcement that he would halt the strikes sent oil prices sharply lower. At the time of writing, West Texas Intermediate crude had fallen 6.76% to $78.94 per barrel, while Brent crude had dropped 5.55% to $83.04 per barrel.
Market Data Temper Saudi Leverage Claim
Treasury data temper Hanke’s leverage claim. Saudi Arabia held $140.3 billion in Treasuries in May, about 1.5% of all foreign holdings and roughly 0.35% of the United States’ nearly $40 trillion federal debt. Treasury cautions that overseas custodians can obscure the ultimate owner.
A rapid sale could lift yields during stressed trading, but the figures suggest Riyadh alone could not dictate the world’s largest government-bond market.
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