LONDON (Reuters) – When the Federal Reserve begins reducing its holdings of U.S. Treasuries as expected later this year, some of the most consistent buyers of U.S. bonds over the last 15 years may be less than willing to fill the breach.

Before the financial crisis, the flow of “petrodollars” was one of the most powerful forces driving the U.S. bond market and the dollar, as oil exporters invested their booming trade surpluses into Treasuries.

But that flow isn’t what it once was, and may be about to dry up further. The Fed’s $1.7 trillion bond-buying stimulus has crowded out demand from oil exporters and their once huge trade surpluses have shrunk thanks to sluggish oil prices.

Far from having plenty of fresh cash to invest abroad, these countries are shoring up finances and safeguarding stability at home.

It is hard to accurately measure oil producing countries’ holdings of Treasuries, but on the face of it, their share of the U.S. bond market is smaller today than it was before the global financial crisis that started a decade ago.

In 2007, 12 oil exporters across the Middle East and Africa held 3.2 percent of outstanding U.S. Treasuries, excluding the Fed’s own holdings, according to Reuters calculations. Last year that share was 2.5 percent.

Interestingly, the 75 percent collapse in the oil price between mid-2014 and early 2016 appears to have had little impact on their holdings of U.S. Treasuries. Not yet anyway.

The same 12 countries held 2.4 percent of outstanding U.S. Treasuries excluding Fed holdings in mid-2014, when oil was $115 a barrel and about to begin its slide all the way down to a new multi-year low of $27.

These countries continue to add to their Treasuries holdings. In 2007 their collective stash was $118 billion, and last year it was over $500 billion.

But oil’s collapse from a record high of $148 a barrel in mid-2008 coupled with the Fed’s QE blitz has diminished petrodollars’ sway over Treasuries.

From Surplus to Deficit

The whereabouts of oil-producing countries’ international investments is notoriously difficult to pinpoint because so little information is publicly disclosed.

Even the size of their holdings can be opaque. In 2007 the International Monetary Fund estimated that United Arab Emirates’ sovereign wealth funds could be anything between $250 billion and $875 billion.

It is assumed that a chunk of petrodollars are reinvested overseas through offshore financial centres such as Britain (London), Belgium, Luxembourg, Ireland, Switzerland and The Cayman Islands.

Of the $17.13 trillion pile of U.S. securities last year from stocks to bonds, these centres held $6.56 trillion, meaning nearly 40 percent of all U.S. financial securities are in six relatively small — or tiny, frankly — hands.

Some of that will almost certainly be diversified into riskier assets like stocks and corporate bonds, which offer higher returns than the sovereign bond yields crushed since the crisis by central bank asset purchases.

By some measures the petrodollar was at the peak of its global powers in 2006. Oil and energy exporters recycled some $500 billion into global bank lending markets and financial markets that year, according to BNP Paribas.

Current account surpluses from 2000 to 2014 were poured into overseas markets via sovereign wealth funds to give these countries a non-oil income and profit stream. The purchase of U.S. bonds was also a function of them keeping their currencies pegged to the dollar.

These boom years have left a deep pool of resources to draw from in the current leaner times. Middle Eastern and African sovereign wealth funds now control over $3 trillion of assets, double the $1.6 trillion or so pre-crisis in 2007.

But with oil below $60 a barrel for the last two years — below $50 for most of that time — their finances are under pressure. In the short term, as has happened with Qatar recently, currency pegs may come under attack. In the long-term, domestic social and economic pressures will see foreign exchange reserves reduced, not increased.

OPEC countries ran a collective current account deficit in 2015 for the first time since 1998. Saudi Arabia’s deficit last year was 8.7 percent of GDP compared to a surplus of nearly 30 percent in 2005.

When the Fed starts its gradual withdrawal from the Treasuries market, Saudi Arabia and other oil exporters are less likely to fill the gap than they would have been only a few years ago.