Saudi Arabia-US petrodollar deal expires, no new agreement in place

A petrodollar agreement between the United States and Saudi Arabia has expired on June 9 and as per reports the Gulf nation has decided not to renew the deal.

This development could signify a global shift away from the US dollar as the primary reserve currency, with potential repercussions for the United States. The termination of this deal, pivotal for America's global economic influence, remains officially unconfirmed for renewal.

The 50-year-old agreement has profoundly impacted geopolitics and economics, shaping the global energy market and international relations. Established in 1974 through a bilateral agreement between the US and Saudi Arabia, the petrodollar system required oil to be priced and traded in US dollars.

Under this system, countries buying oil from Saudi Arabia had to pay in dollars, prompting other oil-producing nations to adopt similar pricing standards. This reinforced the dominance of the US dollar in global oil trade and bolstered the petrodollar system.