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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Konkan railway collects Rs 2.41 crores from pilferage in February
Karwar: The Konkan Railway Corporation Limited (KRCL) collected Rs 2.41 crore in fines and ticket charges from ticketless and unauthorized passengers during February as part of a special ticket-checking campaign conducted across the Konkan Railway route.
According to a press release issued by the corporation, the amount collected in February stood at Rs 2.41 crore, slightly lower than the Rs 2.53 crore collected during January.
The release stated that during February alone, railway staff conducted 873 special ticket-checking operations on the Konkan Railway route. During these drives, a total of 41,522 ticketless and unauthorized passengers were detected and fined, resulting in the collection of Rs 2.41 crore.
KRCL further said that since the beginning of the financial year 2025–26, a total of 10,368 special ticket-checking operations have been conducted up to the end of February.
During these operations, 4,54,849 ticketless and unauthorized passengers were identified, and a total of Rs 25.21 crore was collected as fines and deposited into the railway treasury.
The corporation stated that the special drives are being carried out with the support of railway officials and personnel of the Railway Protection Force (RPF) both in trains and at railway stations along the Konkan Railway route.
Officials of Konkan Railway have appealed to passengers travelling on the route to purchase valid tickets before boarding trains in order to avoid inconvenience.
The release also stated that ticket-checking drives will be intensified across all Konkan Railway routes in the coming days.
