Saudi Arabia’s petrodollar deal with US expires with no new agreement in place
14 June 2024
Published in: Wio News
A petrodollar agreement with the United States and Saudi Arabia has expired. As per reports, the Gulf nation has decided not to renew the deal that expired on June 9.
The move can be seen as a global finance paradigm shift from the USD as a reserve currency. The termination of the deal may also have implications and consequences for America.
The deal was a major milestone for the US global economic dominance. So far, there’s no official confirmation to renew it.
The 50-year-old agreement has had significant geopolitical and economic implications. It acted as a catalyst in shaping the global energy market and influencing international relations.
The petrodollar system was signed in 1974 as a result of a bilateral agreement between the US and Saudi Arabia. Both nations decided to price and trade oil in US dollars.
With oil standardised in terms of dollars, every country purchasing oil from Saudi Arabia would be required to pay in dollars. Several other oil-producing countries also began to standardise their oil pricing in US dollars, which gave push to the petrodollar system.
