Fact-Check: Reports of Saudi Arabia ending Petrodollar Deal is misleading
Washington D.C. — Recent reports suggesting Saudi Arabia's termination of a longstanding petrodollar deal with the United States have ignited widespread online discussions regarding the potential decline of the US dollar as the world's reserve currency. However, several experts have pointed out a fundamental flaw in these reports: there was never a formal petrodollar agreement to begin with.
Paul Donovan, chief economist at UBS Global Wealth Management, addressed the issue in a blog post, highlighting that the narrative had gained unwarranted traction, serving as a clear example of "confirmation bias." He noted, "The story seems to have started in the crypto world. Many crypto speculators desperately want to believe in the dollar’s demise."
The reports suggested that an agreement, allegedly signed between Saudi Arabia and the US in 1974, expired on June 9, 2024, without renewal. This so-called 'petrodollar deal' was purportedly crucial for maintaining the dollar's global dominance. Donovan clarified that while the US and Saudi Arabia did establish a Joint Commission for economic cooperation in June 1974 to help Saudi Arabia spend its sudden influx of oil dollars on US products, this was not a formal petrodollar agreement. In July of that year, Saudi Arabia agreed to invest oil revenues in US Treasuries, a move that was confidential until 2016.
Furthermore, Donovan explained that oil has historically been traded in various currencies, not exclusively the dollar. "In January 2023, Saudi indicated it was happy to negotiate oil sales in other currencies. The possibility changes little for financial markets. Saudi Arabia’s riyal remains pegged to the dollar, and its stock of financial assets are dollar-focused. The dollar’s reserve status depends on how money is stored, not how transactions are denominated," Donovan stated.
The US-Saudi relationship remains robust, with Riyadh continuing to be a key ally in the Middle East. This alliance is particularly significant for the purchase of US arms, which are priced in dollars. Despite China's substantial dollar reserves compared to Saudi Arabia's, efforts to diminish the dollar's global reserve currency status have seen minimal success.
The dominance of the dollar in global oil trade, encompassing transactions, transport, and insurance, is unlikely to wane even if Saudi Arabia were to consider selling oil in yuan. This preference for dollars simplifies transactions, unlike India's experience of buying Russian oil in local currency, where surplus accumulation poses investment or lending challenges for Moscow.
While Riyadh might explore using oil payments for Chinese exports, this is feasible with dollars as well. The oil industry's reliance on the dollar as the primary trade medium is expected to remain unchallenged, maintaining the dollar's predominant role in global financial markets.
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MP minister's veiled remark on Col Sofia Qureshi sparks major row; he apologises, Cong seeks ouster
Bhopal/Indore, May 13 (PTI): Madhya Pradesh Minister and BJP leader Vijay Shah has sparked a major controversy with objectionable comments that appeared to be directed at Col Sofia Qureshi, whom he tried to project as a "sister of terrorists."
Under severe flak, Shah said if anyone is hurt by his statement, he is ready to apologise ten times, adding that he respects Colonel Qureshi more than his sister.
The Congress has appealed to Prime Minister Narendra Modi to sack Shah from the Madhya Pradesh cabinet.
Colonel Qureshi had conducted regular press briefings, sharing details of the 'Operation Sindoor' launched by Indian armed forces to strike terrorists, joined by Foreign Secretary Vikram Misri and Wing Commander Vyomika Singh.
"Those people (terrorists) who had wiped out the sindoor (vermilion) of our sisters (in the Pahalgam terror attack)..We avenged these 'kate-pite' people by sending their sister to destroy them," Shah said.
"They (terrorists) killed our Hindu brothers by making them remove their clothes. PM Modi ji responded by sending their (terrorists') sister in an Army plane to strike them in their houses. They (terrorists) made our sisters widows, so Modiji sent the sister of their community to strip them and teach them a lesson", the BJP leader said while addressing a gathering in Ramkunda village near Indore.
He said, "Revenge was taken for the honour of our country (India), respect, and for the (slain) husbands of our sisters by sending a sister from your (terrorists') community to Pakistan".
The tribal welfare minister clarified that his remarks should not be construed otherwise.
Shah's remarks drew wide-scale condemnation, with Congress demanding his immediate dismissal from the MP cabinet.
Congress President Mallikarjun Kharge said Shah, who made 'derogatory' remarks in reference to Colonel Sofia Qureshi, should be dismissed immediately.
"A minister of the BJP government of Madhya Pradesh has made a very derogatory, shameful and cheap remark about our brave daughter Colonel Sofia Qureshi. The terrorists of Pahalgam wanted to divide the country, but the country was united during the entire 'Operation Sindoor' to give a befitting reply to the terrorists," Kharge posted on X.
He alleged that the BJP-RSS harbours an anti-women mentality.
"First, the wife of the naval officer martyred in Pahalgam was trolled on social media, then the daughter of Foreign Secretary Vikram Misri was harassed, and now the BJP ministers are making such indecent comments about our brave woman Sophia Qureshi," Kharge said and appealed to PM Modi to immediately sack Shah.
Madhya Pradesh Congress president Jitu Patwari shared the video of Shah on X and asked whether the BJP agrees with the minister's "low thinking"?
The MP Congress Committee alleged that Shah's "indecent' and hate-filled" statement is not just a personal attack, but an open attack on India's military dignity, national unity, and women's honour.
Amid the raging controversy, the BJP's Madhya Pradesh general secretary Hitanand Sharma summoned Shah to the state headquarters in Bhopal.
According to sources, Sharma reprimanded the minister, who also met the state BJP president, Vishnu Dutt Sharma.
Speaking to reporters, Shah sought to attribute the intemperate remarks to his "disturbed" state of mind in view of the brutal killing of innocent people in Pahalgam by terrorists.
He claimed many members of his family have a military background and many were martyred.
"Sister Sophia has brought glory to India by rising above caste and religion. She is more respected than our own sister. I salute her for her service to the nation.
"We cannot even think of insulting her in our dreams. Still, if my words have hurt society and religion, then I am ready to apologise ten times,'' he added.
Meanwhile, Congress leader Manoj Shukla and the party workers blackened the nameplate of Shah at his bungalow and raised slogans seeking his resignation.
'हमारी सेना की जांबाज बेटियां आतंकवादियों की बहन हैं'
— Congress (@INCIndia) May 13, 2025
- ये घटिया बात मध्य प्रदेश में BJP सरकार के मंत्री विजय शाह ने कही है।
भारत की जिन बेटियों पर सबको नाज है, उन बेटियों को लेकर ये शर्मनाक बयान दिया गया है। उन्हें आतंकवादियों की बहन बताया गया है।
ये हमारी पराक्रमी सेना का… pic.twitter.com/y591M3ky8G
