What the end of petrodollars means
==========
Saudi Arabia announced on June 13, 2024, that it won't renew the landmark agreement with the US to sell oil exclusively in US dollars. The agreement, signed in June 1974, ensured that the dollar dominates the global oil trade. The end of the petrodollar reflects changes in the global balance of power and the trend toward de-dollarization. The US-Saudi petrodollar agreement was made during the Nixon administration to stabilize the dollar amid economic and political uncertainty. The agreement promoted the use of the dollar in oil and commodities trading and strengthened its position as the world's key reserve currency. However, the US's global position has weakened, and many countries have sought alternative cross-border payment arrangements to reduce their vulnerability to US economic and financial sanctions. The US has become less dependent on Saudi oil due to the shale revolution, while China has become Saudi Arabia's largest oil customer. Saudi Arabia's decision to diversify the currencies used in selling its oil aligns with its strategy to expand international relations beyond the US and Europe. The end of the petrodollar marks a small but symbolic step toward de-dollarization, as countries increasingly use their own currencies in cross-border trade and investment transactions. The dollar's dominance will remain in the foreseeable future, but a gradual democratization of the global financial landscape may be underway, with more local currencies being used for international transactions.
#Petrodollars #SaudiArabia #UsDollar #Dedollarization #GlobalFinance #OilTrade #Currency #CrossborderPayments
https://www.atlanticcouncil.org/blogs/econographics/what-the-end-of-petrodollars-means/
Atlantic Council /
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2024-06-20 17:12:43
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2024-06-20 17:12:43Event JSON
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"content": "What the end of petrodollars means\n==========\n\nSaudi Arabia announced on June 13, 2024, that it won't renew the landmark agreement with the US to sell oil exclusively in US dollars. The agreement, signed in June 1974, ensured that the dollar dominates the global oil trade. The end of the petrodollar reflects changes in the global balance of power and the trend toward de-dollarization. The US-Saudi petrodollar agreement was made during the Nixon administration to stabilize the dollar amid economic and political uncertainty. The agreement promoted the use of the dollar in oil and commodities trading and strengthened its position as the world's key reserve currency. However, the US's global position has weakened, and many countries have sought alternative cross-border payment arrangements to reduce their vulnerability to US economic and financial sanctions. The US has become less dependent on Saudi oil due to the shale revolution, while China has become Saudi Arabia's largest oil customer. Saudi Arabia's decision to diversify the currencies used in selling its oil aligns with its strategy to expand international relations beyond the US and Europe. The end of the petrodollar marks a small but symbolic step toward de-dollarization, as countries increasingly use their own currencies in cross-border trade and investment transactions. The dollar's dominance will remain in the foreseeable future, but a gradual democratization of the global financial landscape may be underway, with more local currencies being used for international transactions.\n\n#Petrodollars #SaudiArabia #UsDollar #Dedollarization #GlobalFinance #OilTrade #Currency #CrossborderPayments\n\nhttps://www.atlanticcouncil.org/blogs/econographics/what-the-end-of-petrodollars-means/",
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