President Joe Biden’s foreign and economic policies have steadily eroded America’s superpower status, but Saudi Arabia’s withdrawal from its 50-year petrodollar pact with the US would be the final blow.
Since the 1970s, Saudi Arabia has sold crude oil for US dollars under the petrodollar agreement, which has contributed greatly to the US dollar’s international standing.
🇸🇦 🇺🇸 The 50-year-old petrodollar agreement between Saudi Arabia and the US has expired and no new agreement has been signed.
From now on, instead of selling oil only in US dollars, Saudi Arabia will sell it in multiple currencies, including yuan, euros, yen and renminbi. pic.twitter.com/MxdUn8t2ZP
— BRICS News (@BRICSinfo) June 12, 2024
The agreement requires foreign countries to have U.S. cash on hand to pay for energy they import from Saudi Arabia. With the agreement expiring (June 9, 2024), Saudi Arabia free It sells oil in any currency, including the Chinese yen and the euro.
While Saudi Arabia has not officially announced an end to the use of the US dollar, the impact that not renewing this agreement could have on the United States internationally and on Americans at home cannot be underestimated.
If the dollar were no longer the world’s reserve currency for these purchases, the United States’ ability to influence market prices for U.S. imports would be reduced to nearly zero. strongly rely on This is because foreign countries need dollars to buy oil, not just because of cheap imports. It is because there is a global demand for dollars that U.S. Treasury bonds can support low interest rates. Factor in skyrocketing gasoline prices and the rising costs of all goods and services, and Americans are at the very least going to be in a recession.
The economy cannot withstand any more shocks to the system. This critical issue does not seem to be getting enough attention.
