2026-1 – The Petrodollar Enforcement Quagmire: Iraq, Libya, Venezuela, and Iran

Since the 1970s, American financial power has rested on one structural pillar: the US dollar’s hegemony. After Richard Nixon decoupled the dollar from gold in 1971, US officials brokered agreements with Saudi Arabia: Washington offered security guarantees and help recycling oil revenues into US Treasuries; Riyadh agreed to price oil exclusively in dollars. The resulting petrodollar system ensured permanent global demand for the dollar, allowing the US to run persistent deficits financed by the rest of the world. Though this arrangement required constant defense, challenges have grown and enforcement has become increasingly coercive—culminating in the recent strikes on Iran.