The inter-dollar agreement between the United States and Saudi Arabia expired last Sunday, so the international financial system built over the last fifty years will be transitioned to a new model without clear parameters.
The Kingdom of Saudi Arabia abandoned the US dollar after refusing to renew the "Altrodollar" agreemen which has been dominant for the last 50 years with the United States, which then led to the price of OPEC and all countries in the world per barrel of oil in US dollars only.
Saudi Arabia will now sell oil in various currencies, including Chinese yuan, euros and dollars, instead of US dollars.As Russia assumed today, an immediate halt to trading in US dollars on the stock exchange.
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The term "petrodollar" refers to the value of the American dollar, the currency used in crude oil transactions in international markets, and the agreement dates back to 1973, when America and Saudi Arabia agreed to it, after. America's departure, the dollar is linked to gold.
The text of the agreement was that Saudi Arabia would price oil exports exclusively in dollars and invest excess oil revenues in American sovereign bonds and purchase American goods. On the other hand, America's history is one of military support and protection. This dollar helped strengthen its position as the world's reserve currency and led to the prosperity of the American economy and Saudi Arabia's complete dependence on America.
Saudi Arabia will continue to accept US dollars for oil, despite temptations from China, Saudi Arabia does not want to get involved in games that destabilize the American economy with China.
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The Biden administration will put the finishing touches on a strategic alliance agreement with Saudi Arabia, and will require America to defend Saudi Arabia and require Saudi Arabia to normalize relations with Tel Aviv, and that may include a new civil agreement.
He does not believe that Saudi Arabia will leave American jurisdiction, but wants to negotiate new terms and most importantly, an American commitment to defend it in the event of an attack, i.e. the end of the dollar agreement is symbolic, but it represents a change towards a brighter economic and geopolitical future. fragmented.
China and Russia are trying to launch a BRICS currency and they want Saudi Arabia to join this currency, especially after Saudi Arabia joined BRICS, and they want to back this currency with gold, which means gold will die when the new currency is introduced.
It took several years before the American dollar lost its status, but this was not due to the absence of sun in the global system, which is America's strength.