Qatar, the world’s largest natural gas shipper, says it will sell gas in euros rather than dollars if requested by a customer. Is this a sign that confidence in the dollar is eroding?

The primary reason Qatar would sell gas for euros would be to diversify its foreign currency reserves, said Qatar’s economy and commerce minister in a February 9 interview. Qatar is one of several nations that have lately signaled a reluctance to hold as many U.S. dollars in reserves as they have in years past.

In December, the United Arab Emirates announced that it would convert 8 percent of its dollar holding into euros by September this year. Central banks in other countries including Italy, Sweden and Russia have also taken similar action.

Natural gas sales by Qatar alone pose little threat to the dollar. However, the challenge to the dollar is in the precedent that would be set. If other nations follow Qatar’s example and begin selling gas, oil and other commodities for euros or other currencies, the dollar would be hit with a giant vacuum of demand.

Global trade of commodities priced in dollars increases the demand for the U.S. currency, thus keeping the dollar strong. Robust dollar demand is something the U.S. economy has become dependant on, and is what allows U.S. monetary authorities to aggressively expand the dollar supply without causing the economy to suffer from inflation.

Although large-scale non-dollar oil and gas sales have not been confirmed, Venezuela, Russia, Iran and Indonesia have all publicly telegraphed their desire to sell commodities in currencies other than the dollar in the near future. Since none of these countries is considered an American ally, their announced intentions may well be more than just currency diversification—but really veiled jabs at the dollar.

Time will tell if non-dollar gas, oil and other commodity sales become more commonplace. If so, expect international demand for the dollar, and consequently the dollar’s value, to wane. Similarly, also watch for inflationary pressures within the United States to build.