Petrodollar

A petrodollar is a United States dollar earned by a country through the sale of its petroleum (oil) to another country. The term was coined in 1973 by Georgetown University economics professor, Ibrahim Oweiss, who recognized the need for a term that could describe the dollar received by petroleum exporting countries (OPEC) in exchange for oil.

The term petrodollar should not be confused with petrocurrency which refers to the actual national currency of each petroleum exporting country.

In addition to the United States petrodollar, a petrodollar can also refer to the Canadian dollar in transactions that involve the sale of Canadian oil to other nations.

Large inflow of petrodollar in a country often has an impact on the value of its currency. For Canada it was shown that an increase of 10% in the price of oil increases the Canadian dollar value versus the US dollar by 3% and vice versa.

Worldwide use of the U.S. dollar and the euro:

  United States

  External adopters of the US dollar

  Currencies pegged to the US dollar - includes many oil producing countries

  Currencies pegged to the US dollar w/ narrow band

  Eurozone

  External adopters of the euro

  Currencies pegged to the euro

  Currencies pegged to the euro w/ narrow band

Note that the Belarusian ruble is pegged to the Euro, Russian Ruble and U.S. Dollar in a currency basket.

See also

• Petro
• Petrocurrency
• Petrodollar recycling
• Petrodollar warfare
• Petrobourse
• Petroeuro
• Monetary hegemony

Further reading

1. The hidden hand of American hegemony : petrodollar recycling and international markets / David E. Spiro. Ithaca, NY : Cornell University Press, 1999. xiv, 177 p. ; 25 cm. LOC call
2. “The Choice of Currency for the Denomination of the Oil Bill," Speech given by Javad Yarjani, Head of OPEC's Petroleum Market Analysis Dept, on The International Role of the Euro (Invited by the Spanish Minister of Economic Affairs during Spain's Presidency of the EU) (April 14, 2002, Oviedo, Spain) [1]
3. “Russia shifts to euro as foreign currency reserves soar,” AFP, June 9, 2003 [2]

External links

• Washington Report
• Petrodollar or Petroeuro? A new source of global conflict, by Cóilín Nunan
• Petrodollar Theories of the War
• MP3 of interview with Carol Brightman author of "Total Insecurity: The Myth of American Omnipotence" in which Saddam Hussein's switch to the euro is discussed
• A Look At The World's Economy (December 2000) from CBS News
• Petrodollar Warfare Interview with William R. Clark with Jim Puplava of the Financial Sense Newshour
• IMF warns trade gap could bring down dollar
• Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse
• History of Oil video done by Robert Newman A vaudeville type story which talks about petrodollar story in the context of the history of oil
• The beginning of the end for petrodollar by Bulent Gokay, 15 March 2006.
• Cost, abuse and danger of the dollar by Rudo de Ruijter, Mathaba News, March 7, 2007.
• In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading