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The Petrodollar’s Original Sin
How the U.S. forced oil trades in dollars (1971-2023);
1. The 1970s: Birth of the Petrodollar
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1971: Nixon ended the Bretton Woods system, decoupling the dollar from gold.
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1973-74: The U.S. struck a secret deal with Saudi Arabia (via the U.S.-Saudi Arabian Joint Commission) ensuring that oil would be priced and traded exclusively in USD.
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In exchange, the U.S. offered military protection and investments in Saudi infrastructure.
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Other OPEC nations followed, making the dollar the global oil currency.
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2. Enforcement: Sanctions & Wars
The U.S. has used economic and military power to maintain dollar dominance:
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Iraq (2000): Saddam Hussein switched oil sales to euros; the U.S. invaded in 2003.
Image 1: An American Obsession -
Libya (2011): Gaddafi planned a gold-backed African dinar for oil; NATO intervened.
Image 2: The US Helped Murder Gaddafi to Stop the Creation of Gold -Backed Currency | by Evangelos -
Venezuela & Iran: Both tried selling oil in non-dollar currencies (euros, yuan, crypto) and faced severe sanctions.
Image 3: Venezuela and Iran hold the largest and third-largest petroleum reserves in the world, respectively. Both have also been targeted for regime change by Washington
3. Recent Challenges (2020s)
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Russia & China: Now trading oil in yuan, rubles, and local currencies.
Image 5: Russia dropping US dollar for Chinese yuan -
BRICS Nations: Pushing for de-dollarization in oil trade.
Image 6: BRICS+ nations determined to trade in their own currencies – Asia Times -
It was never about trade—it was about control;
1. The Real Motive: Locking the World into Dollar Dependency
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Oil is the lifeblood of industrial economies. By forcing oil to be traded in dollars, the U.S. ensured that every country needed massive dollar reserves to buy energy.
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This created permanent demand for the dollar, allowing the U.S. to:
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Print money without hyperinflation (since dollars were always needed).
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Run massive deficits (other nations had to absorb dollar inflation).
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Control global finance (via SWIFT, sanctions, and Federal Reserve policies).
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Evidence:
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Former French President Valéry Giscard d’Estaing called this the “exorbitant privilege” of the U.S. dollar.
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Declassified Nixon-era memos show U.S. officials explicitly discussing how oil-dollar recycling would “maintain U.S. financial supremacy.”
2. Enforcement: Coercion, Not Free Markets
The U.S. didn’t just “convince” countries to use dollars—it punished those who resisted:
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Iraq (2000-2003): Saddam switched oil sales to euros. The U.S. invaded, toppled him, and switched Iraq back to dollars.
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Libya (2011): Gaddafi planned a gold-backed African dinar for oil trade. NATO bombed Libya, he was killed, and the dinar died with him.
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Venezuela & Iran: Both tried selling oil in yuan/euros/crypto—crushed by sanctions.
Key Quote:
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Alan Greenspan (former Fed Chair) admitted in his memoir:
“The Iraq War was largely about oil… and the dollar’s role as the reserve currency.”
3. The Ultimate Goal: Preventing Any Alternative System
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Any country that tried to bypass the dollar was isolated, sanctioned, or attacked.
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The U.S. pressured Europe & Asia to reject alternatives (e.g., China’s yuan oil futures).
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Central banks were forced to hold dollars (or risk losing access to oil markets).
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China’s Checkmate Moves
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2023: Saudi Arabia accepts yuan for oil.
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2024: Russia-Iran-China form “gold-backed oil triangle.”
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Data: PetroYuan trades up 1,200% since 2018.
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The Dollar’s Collapse Symptoms
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Fed panic (secret SWAP lines to Europe). European Central Bank: https://www.ecb.europa.eu/press/economic-bulletin/focus/2020/html/ecb.ebbox202005_01~4a2c044d31.en.html
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U.S. states hoarding gold (Texas, Utah). Statista Graph by June 2019: https://www.statista.com/chart/19123/stockpiling-gold/
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What’s Next?
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BRICS’ “Project Gold Pay” (2025 digital currency). https://kinesis.money/blog/gold/brics-gold-currency-global-economy/
Image 7: BRICS countries and other nations are looking to reduce their dependence on the US Dollar -
Prediction: Dollar’s reserve share <40% by 2030. Taken from Wolfstreethttps://wolfstreet.com/2023/01/01/status-of-us-dollar-as-global-reserve-currency-usd-exchange-rates-hit-foreign-exchange-reserves/
Image 8: US reserve shrinking Call to Arms:
“Dump dollar assets. Buy tangible goods. The financial war is here.”
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More sources:
– PetroYuan oil trades (2018 vs. 2024) https://apjjf.org/2018/22/mathews
– China’s oil partners (Saudi, Russia, Iran, Venezuela) https://www.energypolicy.columbia.edu/publications/chinas-oil-demand-imports-and-supply-security/
