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Traders could start buying their oil using Yuan, for example. That’s not a theoretical anymore

• pfannkuchen 6mo ago
  What percent of dollars are tied up in in-flight oil transactions? And I suppose also in accounts that will be used for oil transactions in the planned future? That’s the mechanism for that supporting the value of the dollar, right, like, increased dollar demand via being used for oil market transactions?
  • 9dev 6mo ago
    The point is that the Petrodollar system requires countries to buy US treasuries to be able to buy oil. That is what makes borrowing cheap for the US, and what keeps the dollar demand up.
    • pfannkuchen 6mo ago
      I'm not clear on how the Petrodollar system actually works. If oil is sold in dollars, that only has to affect dollar demand for the time it takes to transit through some other currency to dollars to oil. So however long that takes to settle. Where do the additional demand components come from? Why do countries have to buy US treasuries to be able to buy oil? Don't they just have to use dollars for the transaction?