Why is it in the news?
→ Developments in Venezuela renewed focus on declining influence of petrodollar.
→ Global oil trade increasingly shifting to non-dollar currencies.
Category: Economy
Important Points
- Venezuela holds ~300 billion barrels (~17% global reserves) but produces ~1 million barrels/day.
- Petrodollar system prices crude oil mainly in US dollars; emerged in the mid-1970s post Bretton Woods. Peak influence during 2002–08 with recycling of oil surpluses into US Treasuries.
- The US became a net oil exporter since 2021 after the shale revolution.
- Around 20% of global crude trade is now in non-dollar currencies (euro, yuan).
- Saudi Arabia increasingly uses oil revenues for domestic budgets.
- Inverse dollar–oil price relationship has weakened.