The Petrodollar Never "Expired." Here's the Real Reason the Dollar Still Rules the World
A viral 2024 post claimed a secret 50-year Saudi oil deal had run out. It was a myth. New IMF data out Sept. 30 show the dollar still makes up nearly 57% of the world's currency reserves. We argue America's strength, not an oil contract, keeps it on top.
By Clara Hughes
Altas World News Opinion Estimated read time: 7 minutes Key takeaways The claim that a "50-year petrodollar agreement" with Saudi Arabia expired in 2024 is false. Fact-checkers found no such deal, and no evidence the kingdom planned to stop selling oil for dollars [1][2]. IMF figures released Sept. 30 show the U.S. dollar made up 56.70% of the world's foreign-exchange reserves at the end of June, more than two and a half times the euro's 20.60% and far ahead of China's renminbi at 2.11% [3]. In our view, the dollar's power comes from America's markets and might, and President Trump's pro-dollar stance, from stablecoin rules to warnings to the BRICS bloc, is a smart way to defend it. The myth that went viral In June 2024, a post on X announced as "breaking news" that "Saudi Arabia will stop using the US dollar for oil sales and will not renew the 50-year petro-dollar agreement with the U.S." The post drew more than 1.5 million views [1]. Versions of the same claim spread in English, Chinese, French and other languages [2]. It was not true. PolitiFact rated the claim False after oil experts said they knew of no evidence that Saudi Arabia planned to stop selling oil in dollars [1]. AFP's fact-check team found no trace of a 50-year expiry date in the U.S.-Saudi agreement the posts pointed to [2]. So let us label it clearly. Myth: a secret 1974 contract forced Saudi Arabia to sell oil only in dollars, and it ran out in 2024. Fact: no such contract has ever been found, and the oil kept flowing for dollars. What really happened in the 1970s The true story is more interesting than the myth. After World War II, the world ran on the Bretton Woods system. Other currencies were fixed to the dollar, and the dollar was convertible to gold at $35 an ounce [4]. Over time, foreign-held dollars came to outnumber the gold America had to back them [4]. On Aug. 15, 1971, President Richard Nixon closed the "gold window," and foreign governments could no longer swap their dollars for U.S…