Petrodollar: Difference between revisions
Oneeyedguide (talk | contribs) Added information on when oil was first priced in dollars. Examined Saudi Arabian oil pricing references and noted as "unsubstantiated sources" rather than studies. This is a common conspiracy theory but is not misleading as written.~~~~ |
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In addition to the United States petrodollar, a petrodollar can also refer to the [[Canadian dollar]] in transactions that involve the sale of [[Canada|Canadian]] oil to other nations. |
In addition to the United States petrodollar, a petrodollar can also refer to the [[Canadian dollar]] in transactions that involve the sale of [[Canada|Canadian]] oil to other nations. |
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The world oil market has been priced in [[United States dollar|United States dollars]] since at least 1945, the end of [[World War II]], because the United States was the largest producer and consumer of oil in the world.<ref>Hamilton, James D. Historical Oil Shocks. Department of Economics. University of California, San Diego. Revised: February 1, 2011, http://econweb.ucsd.edu/~jhamilton/oil_history.pdf</ref> International oil prices were based on discounts or premiums relative to that for oil in the Gulf of Mexico.<ref>Adelman, M. A. (1972. ''The World Petroleum Market''. Baltimore: Johns Hopkins University Press, Chapter5</ref> |
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| ⚫ | According to multiple |
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| ⚫ | According to multiple unsubstantiated sources, in 1972/73, one year after the US [[Bretton Woods System|terminated the convertibility of the US dollar to gold]], the US negotiated with [[Saudi-Arabia]] that saudi-arabian oil shall only be exchanged for the US-Dollar.<ref>Petrov, K. (Jan 17, 2006): [http://www.energybulletin.net/12125.html The Proposed Iranian Oil Bourse], originally published by: Energy Bulletin</ref><ref>[http://www.wiwo.de/politik/ausland/wertverfall-kontrollverlust-im-nahen-osten-beschleunigt-den-wertverfall-des-dollar/8756352-2.html''Das Ende des Petro-Dollar''] in the german "Wirtschaftswoche", 7. September 2013, Retrieved 08. May 2014</ref><ref>[http://www.stern.de/politik/ausland/rolle-der-usa-in-der-ukraine-krise-die-egoistischen-staaten-von-amerika-2108267.html''Die egoistischen Staaten von Amerika''] in the german "Stern", 7. May 2014, Retrieved 08. May 2014</ref> |
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| ⚫ | Large |
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| ⚫ | Large inflows of petrodollars 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%<ref>[http://opendatadepot.org/blog/entry/6/on-the-canadian-dollar-and-the-oil-prices/ Correlation between the oil prices and the Canadian dollar]</ref> and vice versa. |
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Revision as of 16:28, 17 May 2014
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A petrodollar is a United States dollar earned by a country through the sale of its petroleum (oil) to another country.[1] 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.
The world oil market has been priced in United States dollars since at least 1945, the end of World War II, because the United States was the largest producer and consumer of oil in the world.[2] International oil prices were based on discounts or premiums relative to that for oil in the Gulf of Mexico.[3]
According to multiple unsubstantiated sources, in 1972/73, one year after the US terminated the convertibility of the US dollar to gold, the US negotiated with Saudi-Arabia that saudi-arabian oil shall only be exchanged for the US-Dollar.[4][5][6]
Large inflows of petrodollars 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%[7] and vice versa.
See also
References
- ^ The Petrodollar
- ^ Hamilton, James D. Historical Oil Shocks. Department of Economics. University of California, San Diego. Revised: February 1, 2011, http://econweb.ucsd.edu/~jhamilton/oil_history.pdf
- ^ Adelman, M. A. (1972. The World Petroleum Market. Baltimore: Johns Hopkins University Press, Chapter5
- ^ Petrov, K. (Jan 17, 2006): The Proposed Iranian Oil Bourse, originally published by: Energy Bulletin
- ^ Das Ende des Petro-Dollar in the german "Wirtschaftswoche", 7. September 2013, Retrieved 08. May 2014
- ^ Die egoistischen Staaten von Amerika in the german "Stern", 7. May 2014, Retrieved 08. May 2014
- ^ Correlation between the oil prices and the Canadian dollar
Further reading
- 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
