Oil's four-year bull run to +$140 per barrel has increased the wealth of 'petrodollar' nations, and is about set to propel another shift, this time in the bond market.

Petroleum-exporting nations, such as Saudi Arabia and Russia are set to become the biggest creditor nations to the U.S. Government, Bloomberg News reported Monday.

Holdings of petrodollar nations increased 44% to $510 billion through April, Bloomberg News reported Monday -- an increase pace that's set to displace Japan, which holds the largest amount of U.S. Treasuries, at $592.2 billion.

Oil rose about 20 cents to $145.28 per barrel in late Monday afternoon trading.

In a development likely to be warmly-received by international finance and stock markets, Russia announced Thursday it will buy Fannie Mae and Freddie Mac bonds through its sovereign wealth funds, Russia's Finance Ministry said and Bloomberg News reported.

Russia will invest money from its Reserve Fund and National Wellbeing Fund into 15 government bond funds in Europe and the United States, including those in Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Russia will also purchase government bonds in the U.K., Germany, France, Austria, Canada, and the Netherlands, Bloomberg News reported.

Both Fannie, down 56 cents $29.27, and Freddie, down 80 cents to $27.94, moved lower Thursday afternoon; however it should be noted that the declines occurred during a broad market sell-off, with the Dow down 159 points to 12,267.

Make that two positive data points for the markets and the international financial system on Wednesday.

Shortly after word broke that regulators at the New York State Insurance Department met Wednesday with U.S. banks to discuss raising new capital for bond insurers, Saudi Arabia announced that it plans to start its first sovereign wealth fund with about $6 billion, Bloomberg News reported Wednesday.

Saudi Arabia, the world's largest oil producer and holder of proven oil reserves, said the new fund would probably invest primarily in equities, Bloomberg News reported.

Petrodollar wealth

Like many Persian Gulf states, and other oil producers, Saudi Arabia has seen a surge in petrodollars amid oil's more-than-80% increase in price during the past three years. Most analysts say Saudi Arabia can pump oil profitably for about $3-$5 per barrel. Oil closed Wednesday down $2.22 to $86.99 on renewed concerns of moderating oil demand growth, due to the likely U.S. economic slowdown.

Most investors and readers are aware of the subprime mortgage-driven credit market slump. Lending to potential customers has declined substantially, from typical homebuyers to large corporations.

To be sure, the credit markets are not frozen, as they appeared to be during the August 2007 credit crunch and accompanying equity market sell-off, but lending requirements are much more rigorous today, following large subprime investment losses.

Speculative deals -- be it a large debt offering backed by mortgages, or a mortgage for a condominium project -- are not being approved. Two years or so ago, flush with cash and eager to take advantage of the yield spread, these type of deals undoubtedly would have received multiple funding offers from banks, mortgage companies, and other investment firms.