In the television series, this is communicated in an interview with Gwin Follis, former chairman of Standard Oil of California, filmed in what appears to be a palace.
"We made an agreement with Ibn Saud that we would give him gold. For every ton of oil we took out of his country we would give him gold. And we did at first. Then we got to be producing more and more and more, and we would try to find more gold shillings to meet the requirements so we could ship another ton. And we had to tell him we couldn't find any more gold. There wasn't that much gold. We had now such an enormous business that we cleaned the world of gold shillings."
From The Prize, Part 5- Crude Diplomat at 31:24.
<https://yewtu.be/watch?v=k7g5UMxDZIg&list=PLYkO4hiKyrSRjZLQu...>
This illustrates a number of elements: the enormous scale of the oil business, the challenges of a gold-backed monetary system, and the challenges of an exceptionally one-sided trade.
Going off the gold standard and dollarising oil sales solved several problems:
- The US had an unlimited supply of dollars.
- Saudi Arabia (and other oil exporters) wouldn't see their own currencies appreciating due to an unbalanced inflow of payments.
- Global demand for dollars in trade meant that dollarised petroleum sales wouldn't lead to either appreciation or depreciation of that currency.
- Basing international trade on a managed rather than specie / gold-backed currency meant that monetary policy could be used to adjust money supply to economic conditions.
On TFA, the precipitous decline of US gold reserves beginning in 1950, the year in which the US became a net importer of oil, is illuminating.