3 ms·

This whole "you need US dollar to buy oil" is a silly argument. You need US dollars to buy ipods too. Luckily money is fungible.

• mseebach 14y ago
  It's also wrong. Yes, the spot markets are priced in dollars, but for an example, almost the entire Saudi production is sold directly to large clients. I'm sure they'd be happy to negotiate settlement in whatever currency or commodity they can use.
  • davvid 14y ago
    Iraq converted its petro trading to the Euro back in 2000, but that didn't last too long and is one of the reasons the US invaded, or so the story goes. This is the gist of a theory called "petrodollar warfare"[1]. Saudi Arabia is an ally hence they trade in dollars; there was quite a stir the last time there was a rumor related to them dumping the dollar[2]. I don't think them switching to another currency is quite that easy. [1] http://en.wikipedia.org/wiki/Petrodollar_warfare#Political_events http://en.wikipedia.org/wiki/Petrodollar_warfare#Political_e... [2] http://www.dailymail.co.uk/money/article-1218458/Dollar-remain-oil-currency-say-Saudi-Arabia-Russia.html http://www.dailymail.co.uk/money/article-1218458/Dollar-rema...
    • mseebach 14y ago
      Those links doesn't address the fact that most Saudi oil isn't sold on the spot market. They can be fully committed to maintaining the dollar as the currency of the spot market, while negotiating their sales to long term clients in whatever medium they feel like.