Petrodollar: Saudi Arabia Ditching the Dollar Will Affect 3 US Sectors

Juhi Mirza
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Source: / azatvaleev

The petrodollar mayhem has intensified as Saudi Arabia recently shocked the world by not renewing its decades-old petrodollar agreement with the US. The Saudi Arabia regime seems to be betting big on the multipolar, anti-US Dollar narrative. The nation is poised to sell oil in currencies denominated in Yuan, RMB, Euro, and Yen, bolstering the regional currency supremacy agenda.

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Petrodollar Mayhem: What’s Happening?

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Source: Reuters

With the increasing multipolar narrative sweeping over the world, countries and nations have now actively started to adopt the idea of regional currency supremacy. Saudi Arabia, which has long been working in sync with the archaic petrodollar agreement, has suddenly decided to not renew the contract. The development has given the speculatory spree a chance to run amok.

The expiration of the Petrodollar contract may spell serious trouble for the US economy. The consequences are capable of triggering less demand for the US dollar to purchase oil globally, which could later impact the price of USD in the world markets. At the same time, the “slip up” of the Petrodollar contract can give a significant boost to the USD’s alternatives such as the Yuan and Euro, which can jeopardize USD’s position as the global leading reserve currency.

3 Sectors That May Get Affected If US Ditches The Dollar

With the lapse of the petrodollar agreement, the speculatory bandwagon has gained significant strength on X. With the regime already promoting the multipolar currency idea, the US dollar could soon feel alienated from the lot.

The petrodollar lapse can significantly affect the US energy sector. The agreement has long supported trading oil in US dollars. With a new dynamic shift promoting other currencies, the development could impact the oil pricing scenario in the US, thereby intensifying the energy sector mayhem.

Also Read: Saudi Arabia Ditches US Dollar, Will Settle Oil Payments in Yuan, Euro

The financial sector is the next possible domain that may be impacted by the recent petrodollar demise. The lapse could compel the USD to document low demand, which later can affect its pricing in the long term.

If the dollar weakens due to low demand, this could lead to high commodity pricing in the US economy. This may further hamper the trade sector proceedings. It can add more pressure on the pockets of average US households.