The End of the Petrodollar With Bitcoin As the Big Winner? Mind You, It’s Not Quite That Simple!

Some musings on the matter.

Recently, a growing rumor has taken hold of social networks: Saudi Arabia has ended the petrodollar system. Accounts on X, which spread the news from the BRICS countries, are having a field day announcing the death of the petrodollar.

According to these X accounts, a 50-year-old agreement between Saudi Arabia and America has expired. This agreement obliged Saudi Arabia to denominate its oil in dollars. Henceforth, Saudi Arabia would be free to sell its oil in RMB, Euros, Yen, or Yuan, and no longer exclusively in US dollars.

Some then went even further, saying that the death of the petrodollar would benefit Bitcoin. For some, everything is supposed to benefit Bitcoin despite common sense... These same influencers found a shortcut by announcing the imminent emergence of petrobitcoin.

Rather than let the influencers dictate what you should think on the subject, I felt it essential to take stock of the situation. That's what I'm doing in the rest of this article, with a historical review of the petrodollar system.