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  • Writer's pictureRealFacts Editorial Team

Saudi Arabia May Not Renew the Petrodollar Agreement

Saudi Arabia

In the early 1970s the U.S. and Saudi Arabia signed an agreement known as the Petrodollar agreement, the terms of the agreement were that the U.S. would provide Saudi Arabia with military assistance and security and that in return Saudi Arabia would transact all oil dealings using the U.S. dollar as the currency. It currently seems as if (even though it has not yet been confirmed) that in June of 2024 Saudi Arabia will be announcing that it will not be renewing the agreement, and will begin accepting other forms of currency for its oil. Below is a tweet that has recently gone rather viral in the finance twitter community talking about this potential shift.

Vandell tweeting about saudi arabia

If Saudi Arabia does decide to move away from using the dollar exclusively, this would seriously weaken the dollar, and also contribute to the “dedollarization” of foreign business transactions. This is not good news for the dollar as it is already struggling due to domestic inflation. The above tweet ends with the line, “Now you know why Gold is moving”, as if to say that Gold is on the rise because people know the dollar is weakening. He may have a point however, as the dollar starts to lose its grip investors will begin turning to alternative currencies, such as gold and other precious metals, as a better investment for their capital. This is currently just speculation, but the agreement expires on June 9th and it appears as if this is where things are heading in that regard.


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