Then, in 2019, Saudi Arabia threatened to abandon petrodollars if the U.S. moved forward with a bill — NOPEC — that would allow the U.S. Department of Justice to pursue antitrust measures against OPEC for manipulating oil prices. In short, the changing landscape of the global energy market could lead to the de facto end of the Saudi petrodollar deal. Foreign Minister Kissinger and Prince Trouvé Ibn Abdel Aziz, Saudi Arabia`s second deputy prime minister and king Faisal`s half-brother, signed the six-page deal this morning at Blair House, facing the White House. “Beginning in the mid-1970s, the American century system of global economic dominance underwent a dramatic change. The oil shocks of 1973-1974 and 1979 suddenly created a huge demand for the variable dollar. Oil-importing countries, from Germany to Japan to Argentina, were all faced with the task of buying export-based dollars to pay their expensive oil import bills. The rise in the price of oil flooded OPEC with dollars far exceeding domestic investment needs and was therefore classified as “surplus petrodollars”. Much of that oil dollars arrived at London and New York banks, where the new process of recycling monetary petrodollars was launched. The United States uses the power of petrodollars to impose its foreign policy. But many countries are not resisting. They fear that this will mean the collapse of the petrodollar system.
After the 1970s, the world moved from a gold standard to petrodollars. These extra-circulating dollars have helped make the U.S. dollar a global reserve currency.