Cibre: The Petrodollar Agreement has ended, a new period begins in the global economy

Economist Iris Cibre announced in her post on her social media account that the Petrodollar Agreement, which was initiated by Saudi Arabia and the USA in 1973, ended on June 9. Evaluating the possible effects of the end of the agreement on the global economy, Cibre stated that this situation will not cause an immediate loss in the status of the US Dollar, but may be a harbinger of important changes in the future.

OPEC’s embargo on countries that supported the Kippur wars that broke out in the Middle East in 1973 led to a global economic crisis. As a way out of this crisis, the USA persuaded Saudi Arabia to accept the arms sales, which they had previously rejected, and to sell oil only in dollars. This agreement paved the way for the strengthening of the USA as the reserve currency and enabled the dollars accumulated in OPEC countries to be spent on US borrowings.

Cibre drew attention to the meeting of BRICS countries after Saudi Arabia ended the Petrodollar agreement. Stating that the most important topic of discussion at the upcoming BRICS meeting will be the common currency, Cibre emphasized that there may be significant changes in global trade if Saudi Arabia starts selling oil with the BRICS currency.