The 50-year petrodollar agreement between the United States and Saudi Arabia that designated the U.S. dollar as the global-trade currency for oil sales ended on June 9. The U.S. dollar was essentially the “gold standard” of the global oil trade. Now this is no more, renewing concerns about “de-dollarization” and the future of the American economy.
“Oil exporters settle sales in U.S. dollars because the dollar is the most widely used currency, making it easier for them to invest export proceeds,” explains Investopedia.
🛢️ Petrodollar Deal ended yesterday. The 50-year deal between the USA & Saudi Arabia to sell oil in dollars is over.
This would lead to lower demand of US Dollar. Do you think it gets renewed? 💸
— Grant Cardone (@GrantCardone) June 10, 2024
Last year, the Heritage Foundation blamed U.S. sanctions for the continued decline of the dollar. Economist Peter St Onge noted that “unprecedented U.S. sanctions against Russia — designed as retribution for Vladimir Putin’s invasion of Ukraine — have been driving friendly countries, from Brazil to Saudi Arabia, away from the dollar and into the arms of the BRICS coalition of anti-dollar nations led by China.”
“Thanks to this concentrated push by China, the dollar’s share in global commerce is plunging. Today, only 40% of world trade is settled in U.S. dollars, down from 52% just a decade ago,” according to St Onge.
Benn Steil, director of international economics at the Council on Foreign Relations, concurred that “the biggest threat to the dollar’s
