There were rumors that Iraq under Saddam Hussein was looking to start pricing their oil exports in something other than dollars...
> Traders appear to embrace yuan oil futures contracts, pricing them similarly to the Brent and WTI benchmarks, says analyst
> According to Bloomberg Intelligence, the volume of crude oil contracts traded on the Shanghai International Energy Exchange (INE) accounted for 10.5 per cent of the global volume at the start of June compared to 6.2 per cent in the second quarter of 2018.
https://www.scmp.com/business/china-business/article/3088802...
EU also wants to start trading oil in Euros:
https://pemedianetwork.com/petroleum-economist/articles/corp...
The best you could say about that theory is that it's confusing cause and effect. Other nations which have been hostile to and sanctioned by the US for some time also shifted from dollars to Euros.
But the implied threat towards anyone who say, started dumping US sovereign debt, or transacting petroleum in EUR, or whatever is very real. Countries have been liberated for less.
https://www.cnbc.com/2020/11/02/china-drops-us-treasurys-imp...
Russia has started transacting petroleum in EUR. They haven't been "liberated" yet.
https://www.reuters.com/article/us-rosneft-contracts-euro-id...
Petroleum transaction only make up a small fraction of worldwide dollar use. It doesn't really matter.
https://foreignpolicy.com/2009/10/07/debunking-the-dumping-t...
I do think it’s interesting to note that both of the examples you used are the only two countries that the US military wouldn’t like to try its hand against. And there is a broader point there: my original point becomes less relevant the further that global US hegemony slips.
> The dollar has value primarily because taxes inside the US are denominated in dollars.
The amount of USD reserves outside US is huge. Entities that hold these reserves have no interest in paying taxes to US government.
But most importantly, there's Saudi Arabia. Saudi Arabia has no military except the US military, and Saudi Arabia prices oil in dollars. It isn't conceivable that they could price oil in another currency and still receive protection from the US (i.e., continue to exist).
The US kind of "has" to continue this arrangement because if the world stops trading oil in dollars, the demand for dollars plummets and the dollar crashes because there are just too many dollars out there. The Fed can't "suck in" all that excess money without causing a severe recession/depression.
https://foreignpolicy.com/2009/10/07/debunking-the-dumping-t...
That said, I'm not 100% convinced. If we stop trading oil in dollars, doesn't that reduce the need for countries to keep dollars in reserve? It could be the beginning of a slippery slope.
What is useful is having quadrillions of dollars of other payment obligations denominated in dollars, from the IRS to mortgage debt to IMF loans to international financial markets to people paying cash rent in Ecuador, and a central bank that can raise interest rates if it believes the demand for dollars is falling.
Sterling is still valuable, despite the fact it stopped being the main global reserve currency decades ago and the UK doesn't have any real ability to invade people to change that.
Source? Specifically, a source that can pinpoint a statement by a Libyan official in the immediate run-up to the intervention in Libya (i.e., late 2010 or early 2011) indicating a desire to switch to selling oil in euros.
The closest I've ever seen to such a source is that one of the cables released in the Wikileaks leak reported that a source close to Sarkozy outlined a few reasons why he wanted to intervene of Libya, one of which was a desire to replace the CFA franc (effectively backed by France) with a gold-based Libyan dinar.
And apparently it was enough for the Secretary of State's people to see, too.
Now it's important to note the context of the source. The diplomatic cables are--effectively--gossip reports. In general, they're not indications that anyone actually believes them, nor indications that their reports are causes for action. A report that a French president is concerned about threats to French suzerainty in its former African colonies is exactly the sort of thing that I'd go "right, I believe that... and I don't care." There is yet, to my knowledge, any evidence that this actually influenced US foreign policy in any manner whatsoever, let alone supports the petrodollar-supremacy narrative.
Why the US and the West targeted an anti-Western, terrorism exporting dictatorial regime with a history of trying to acquire WMD whose overt ideology was a blend of totalitarian socialism and a unique version/descendant of Islam during a period where it was unusually active in targeting anti-Western, Islamic regimes especially those with a history of trying to acquire WMDs under the aegis of a war on terror?
Dunno. Must be rumors that they planning to move away from the CFA Franc somehow raising worries that they’d stop selling oil for dollars.
More to the point, many nations sell oil for non-USD. It's quite common. Further, the oil trade is a small fraction of international USD movement. The idea that the "petrodollar" is a major factor in international politics is... unlikely to be true.
Name the largest, why obfuscate?
I was under the impression that the Saudis literally didn't have a military, because the ruling family was afraid of coups.
This laughably wrong.
You should read the other comments before you add your own.