The Petrodollar warfare

Posted by Oilism.com on December 23rd, 2007 at 06:41pm

This is word that has hiding meaning with it which is sometimes coined as the hidden foreign policy of United states that has helped the US dollar to remain the world’ main currency in international trade and in which the oil is priced. It is also sometimes termed as oil currency war. This single most policy of United States have kept US in fore front of many international decisions and made US a world leader for last many decades.

There is a thought that the petrodollar warfare has kept the US dollar as world currency because some main commodities like oil and natural gases is traded in dollar and if the denomination of trading oil and gases is moved to any other currency like pound then most countries will start selling their dollar reserves bringing a quick shift in the US dollar price. Once the price of dollar goes down it will directly hurt the US economy bringing a rise in inflation and many other economic determinants. US administration officials are scared that if the denomination of oil is changed then that’s going to literally damage the position of US in international politics. This fear of loosing status was supposed to be main reason behind the US invasion in Iraq since Iraqi administration had changed the  currency to trade oil from dollar to Euro in late 2000 but that was later again revoked in 2003 after the invasion.

The oil price and US dollar seem to be inversely proportional in times. Once the oil prices start rising the dollar goes down as when dollar strengthens it lowers the price of oil and viceversa. SO that makes United States in position which can determine the role of oil in its favor by using undermined policies. The physical location of major oil reserves too has determining factor in this industry so United States always has tries to keep a hold on currency that the whole industry is trading with.

Under Crude oil+ OPEC+ Oil+ Oil Theory+ Oil industry+ Oil politics