Saudi Arabia may sell US Treasuries if US strikes Iran

Geopolitical tensions in the Middle East are once again in the spotlight as reports suggest that Saudi Arabia may consider a significant financial maneuver if the U.S. initiates military action against Iran’s energy infrastructure. According to geopolitical analyst Brandon Weichert, Saudi Arabia is unlikely to passively absorb the repercussions of potential Iranian retaliation, which could include targeting the Aramco oil conglomerate. In response, Riyadh has reportedly threatened to fund necessary repairs by liquidating substantial holdings of U.S. Treasuries. This move is perceived as an escalation that could strain the financial and diplomatic ties between Riyadh and Washington.

The potential for increased U.S.-Iran tensions and Saudi Arabia’s financial strategy appear to be influencing prediction markets related to a possible U.S.-Iran deal in 2026. The likelihood of an agreement involving Iran Reconstruction Funding is currently priced at 35.5% YES, while sub-markets reflecting various aspects of such a deal show fluctuating probabilities. Recent developments, including the threat of Saudi financial action, suggest a decrease in the likelihood of a comprehensive agreement between the U.S. and Iran, as markets appear to interpret these events as heightening geopolitical instability.

Key Takeaways

• Saudi Arabia’s potential liquidation of U.S. Treasuries appears consistent with an escalation in diplomatic tensions.
• Market pricing suggests participants view the likelihood of a U.S.-Iran deal in 2026 as decreasing amid rising regional tensions.
• The possibility of Iranian retaliation against Saudi Aramco could further complicate negotiations between the U.S. and Iran.

What to Watch

Observers should monitor any official statements or actions from Saudi Arabia regarding its U.S. Treasury holdings, as this could indicate an escalation in response to U.S. military actions against Iran. Additionally, developments in the U.S.-Iran negotiations, particularly any changes in the market probabilities of a 2026 deal, may indicate shifts in geopolitical dynamics. Key actors in these negotiations, such as U.S. President Donald Trump and Iranian Foreign Minister Javad Zarif, could play pivotal roles in influencing the outcome.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.