Saudi Arabia has ended its decades-long petrodollar agreement with the United States, marking a significant shift in the global financial landscape. The agreement, in place since 1974, allowed the US to secure oil from Saudi Arabia by establishing joint commissions for economic cooperation and supporting the country’s military needs.
Impact on Currency Usage
The termination of the agreement means that Saudi Arabia can now sell oil and other goods using various currencies, including the Chinese RMB, Euros, Yen, and Yuan, instead of exclusively using the US dollar. This move significantly impacts the US dollar’s status as the global reserve currency and has sparked speculation about the potential use of digital currencies like Bitcoin for oil transactions.
Trend Towards De-dollarization
Saudi Arabia’s decision to abandon the petrodollar agreement is part of a broader trend towards de-dollarization, aiming to reduce the use of the US dollar in international transactions. This shift seeks to diversify economic relationships and reduce dependence on a single currency.
🇸🇦🇺🇸 Saudi Arabia ditches US dollar and will NOT renew the 50 year ‘petro-dollar’ agreement with the United States.
Saudi Arabia will now sell oil in multiple currencies, including the Chinese RMB, Euros, Yen, and Yuan, instead of exclusively in US dollars. pic.twitter.com/BJiB5kgWoW
Advertisement— Radar🚨 (@RadarHits) June 12, 2024
The impact of this move on the global financial system is significant, as it challenges the US dollar’s dominance and creates new opportunities for other currencies and digital assets. Saudi Arabia’s decision to trade oil in multiple currencies has boosted hopes among existing alliances, such as BRICS and ASEAN, which have long promoted moving away from the US dollar.
Rise of Bitcoin in Oil Transactions
The use of Bitcoin for oil transactions is also gaining traction, with some analysts speculating that the cryptocurrency could become a viable alternative to traditional currencies. The recent surge in Bitcoin’s price and the growing institutional adoption of the cryptocurrency have contributed to this speculation.
Overall, the termination of the petrodollar agreement between Saudi Arabia and the US marks a significant shift in the global financial landscape, with far-reaching implications for the US dollar’s status and the potential use of digital currencies like Bitcoin.
Saudia Arabia dropping the petrodollar has HUGE implications, and likely signals the beginning of the end for the American Empire.
But tonight’s news will probably be focused on something Trump said or someone being arrested for defacing a Pride display.
Advertisement— Eric Sammons (@EricRSammons) June 12, 2024
