The era of the petrodollar is coming to an end, writes Oilprice.com, a popular fossil fuel news web resource.
In particular, this is facilitated by Saudi Arabia, which is gradually moving away from selling raw materials for US dollars, switching to euros, yen and yuan.
Oilprice.com writes.
Since the 1950s, the dollar has received support from world trade, which has significantly supported demand for US debt. And this factor, in turn, kept inflation in America itself.
That is, all newly printed dollars are immediately bought up by foreigners who need them to pay off their debts denominated in American currency, as well as to replenish reserves. But, if the dollar’s global dominance is indeed on the wane, we can expect higher inflation as well. [в самих США]and higher interest rates. In other words, as the influence of the dollar declines, the US authorities will no longer be able to monetize debt and build deficits without fear of high inflation or a drop in the value of Treasuries. The end of the petrodollar is not a cause for panic right now, but it is the latest sign that US power, exercised through the dollar, is starting to wane.
– indicated in the publication.
After abandoning the gold standard in the 1970s, the United States persuaded Saudi Arabia to sell its oil exclusively for dollars, which gave the American currency a material content. In return, Washington provided the Arabian monarchy with military protection. Later, other OPEC states also adopted this concept.
The order worked for decades. However, now Riyadh needs the Americans much less than before. In addition, India, China and Russia are increasingly interested in abandoning dollars in their trade, including energy.
