Saudi Arabia has decided not to renew its 80-year petrodollar deal with the United States, which expired on Sunday, June 9, according to media reports. This historic agreement, initially signed on June 8, 1974, played a crucial role in establishing US global economic dominance.
The original deal set up joint commissions for economic cooperation and addressed Saudi Arabia’s military needs. American officials hoped it would incentivize Saudi Arabia to increase oil production and strengthen economic ties with Arab countries.
By choosing not to extend this contract, Saudi Arabia is now free to sell oil and other goods using various currencies such as the Chinese RMB, Euros, Yen, and Yuan, instead of only US dollars. There is also speculation about the potential use of digital currencies like Bitcoin for transactions.
This decision signifies a significant departure from the petrodollar system, which was established in 1972 when the US decoupled its currency from gold.
