The 1945 agreement between the United States and Saudi Arabia strengthened the relationship between the dollar and oil. The petrodollar was born. Although controversial, petrodollar remains the dominant medium for international oil trade. Producers and consumers around the world trade dollar-denominated oil as an industrial standard. This brief article describes the actions, incentives and consequences that the United States has created through its attempts, the global hegemony by what is known as the petrodollar system. This petrodollar system, or more simply known as the “oil-for-dollar” system, has created an instant artificial demand for U.S. dollars worldwide. And of course, when global demand for oil increased, demand for U.S. dollars also increased. The abandonment of the gold standard by the United States in 1971 had a profound impact on oil-producing regions, particularly OPEC members. At the time, much of the oil product guarantee contracts were denominated in the USD. The sudden depreciation of the dollar following the release of the gold standard has reduced the value of existing agreements and contracts.
OPEC officials have been trying to assess oil exports in gold rather than dollars, but no major changes have been made.  There is a threat to petrodollar, as the world moves from oil to renewable energy. After the 1970s, the world changed from a gold standard to petrodollars. These additional dollars have helped make the U.S. dollar the world`s reserve currency. The petrodollar system also facilitates the recycling of petrodollars, creating liquidity and demand for assets in financial markets. However, the cycle could be over if other countries abandoned petrodollars and began to accept other currencies for oil sales. “petrocurrency” or “petrodollars” are popular abbreviations for revenues from oil exports, particularly by OPEC members as well as by Russia and Norway. Especially in an age of historically expensive oil, associated financial flows can reach hundreds of billions of equivalents per year – including a wide range of transactions in a wide variety of currencies, some related to the U.S. dollar and others not.   If you`ve never heard of the petrodollar system, I won`t be surprised. It is certainly not a subject that strays too often from the circles of Washington and Wall Street.
Traditional media rarely, if at all, discuss the inner life of the petrodollar system and how it has motivated and even directed U.S. foreign policy in the Middle East in recent decades. Finally, we look at the recent challenges facing U.S. economic policy around the world and how the petrodollar system influences our foreign policy efforts in oil-rich countries. The collapse of the petrodollar system, which I believe will occur in this decade, will make the Nixon shock of 1971 look like a dress rehearsal. Itaipu Dam between Brazil and Paraguay, financed by bank loans of petrodollars in the 1970s [self-published source] In particular in 1974-1981 and 2005-2014, oil exporters accumulate large surpluses in “petrodololes” from historically expensive oil.    (The word was alternately attributed to the American-American economist Ibrahim Oweiss and the former US Secretary of Commerce Peter G.