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You’ve been able to buy gulf oil in non-us currency all along. You can buy it in yuan, pounds, euros etc. Dollar hegemony isn’t because of the petrodollar. It’

You’ve been able to buy gulf oil in non-us currency all along. You can buy it in yuan, pounds, euros etc. Dollar hegemony isn’t because of the petrodollar. It’s the other way around. The oil states throw off huge amounts of profit and oil is such a big market you need the dollars reach to service it.

fakedang 7mo ago
You can't buy them off the bat from a petrostate. Heck, even China had to enter multi-year special negotiations with Saudi Arabia to even get a batch of oil sold in yuan terms. Gaddafi and Saddam Hussein were the two proponents of selling oil in euros, and look where that led them. The spot market is different but that's not where most of the world's oil is sold. > The oil states throw off huge amounts of profit and oil is such a big market you need the dollars reach to service it. The oil states prefer dollars (and have pegged their currency to the dollar) solely because of a number of historical decisions that enabled dollar hegemony, which made the oil states peg their currency to the dollar and prefer the USD. That's changing now, but only very recently and at a snail's pace.
- kasey_junk 7mo ago
  You can’t trade oil in any currency off the bat. It’s a complex market involving globe spanning logistics and geopolitics. But I’ve personally traded oil in euros and know people that trade it in pounds daily. The yuan negotiations were complex because China wanted to get the currency controls set right so that it didn’t destabilize their peg while the saudis didn’t want get stuck with the worlds most illiberal currency. This week India went back to trading for oil in rupees with an American global adversary at the behest of the US president. The gulf states bargain on security was a boon for them and the states, but again the correlation was reversed. The Americans provided security, a willing and ravenous market for the goods and a stable liberal currency when few others could.
  - fakedang 7mo ago
    > I’ve personally traded oil in euros and know people that trade it in pounds daily. Don't equate spot market buying with what countries do for national supply. When countries buys from Petro states, they're not buying on the spot market. You cannot buy oil from Saudi Aramco in pounds or euros because why not. They will simply laugh you out of the office and tell you to deal with an oil trader (the actual people you're dealing with, on the spot market). But you can actually buy from them directly in USD (which a lot of the aforementioned trading firms like Glencore, Trafigura and even Jane Street actually do).
    - deleted 7mo ago
      [deleted]
    - kasey_junk 7mo ago
      Your hypothesis then is that if Oman prices a single term contract not in dollars that will _cause_ the end of dollar hegemony rather than be the result of it? Even though the largest oil producer in the world will continue to price in dollars no matter what. The third largest oil producer was forcibly dedollarized already and the gulf state national producers already sell oil into the spot market outside of dollars today?

fakedang 7mo ago

You can't buy them off the bat from a petrostate. Heck, even China had to enter multi-year special negotiations with Saudi Arabia to even get a batch of oil sold in yuan terms. Gaddafi and Saddam Hussein were the two proponents of selling oil in euros, and look where that led them. The spot market is different but that's not where most of the world's oil is sold. > The oil states throw off huge amounts of profit and oil is such a big market you need the dollars reach to service it. The oil states prefer dollars (and have pegged their currency to the dollar) solely because of a number of historical decisions that enabled dollar hegemony, which made the oil states peg their currency to the dollar and prefer the USD. That's changing now, but only very recently and at a snail's pace.

kasey_junk 7mo ago
You can’t trade oil in any currency off the bat. It’s a complex market involving globe spanning logistics and geopolitics. But I’ve personally traded oil in euros and know people that trade it in pounds daily. The yuan negotiations were complex because China wanted to get the currency controls set right so that it didn’t destabilize their peg while the saudis didn’t want get stuck with the worlds most illiberal currency. This week India went back to trading for oil in rupees with an American global adversary at the behest of the US president. The gulf states bargain on security was a boon for them and the states, but again the correlation was reversed. The Americans provided security, a willing and ravenous market for the goods and a stable liberal currency when few others could.
- fakedang 7mo ago
  > I’ve personally traded oil in euros and know people that trade it in pounds daily. Don't equate spot market buying with what countries do for national supply. When countries buys from Petro states, they're not buying on the spot market. You cannot buy oil from Saudi Aramco in pounds or euros because why not. They will simply laugh you out of the office and tell you to deal with an oil trader (the actual people you're dealing with, on the spot market). But you can actually buy from them directly in USD (which a lot of the aforementioned trading firms like Glencore, Trafigura and even Jane Street actually do).
  - deleted 7mo ago
    [deleted]
  - kasey_junk 7mo ago
    Your hypothesis then is that if Oman prices a single term contract not in dollars that will _cause_ the end of dollar hegemony rather than be the result of it? Even though the largest oil producer in the world will continue to price in dollars no matter what. The third largest oil producer was forcibly dedollarized already and the gulf state national producers already sell oil into the spot market outside of dollars today?