[Jeff Lebowski]

Originally Posted by Matata

But then you have to share with the Venezuelans, It's much more profitable to use political and military influence (taxpayer funded) to just take it, and selling that intervention to the American people is cheap, as they already own the media.

Just need the USD to continue to be the petrodollar reserve currency to continue to get this exorbitant privilege - especially for the military. I wonder what happens to countries that don't want to use the USD?

The United States dollar remains de facto world currency.[1] Accordingly, almost all oil sales throughout the world are denominated in United States dollars (USD).[2] Because most countries rely on oil imports, they are forced to maintain large stockpiles of dollars in order to continue imports. This creates a consistent demand for USDs and ostensibly supports the USD's value, regardless of economic conditions in the United States.

According to proponents of the petrodollar warfare hypothesis, this in turn allegedly allows the US government to gain revenues through seignorage and by issuing bonds at lower interest rates than supposedly they otherwise would be able to. As a result, the U.S. government, according to this theory, can run higher budget deficits at a more sustainable level than most other countries can. The theory points out that a stronger USD also means that goods imported into the United States are relatively cheap (although the country's exports become relatively more expensive for the rest of the world).

Another component of the hypothesis is that the price of petroleum is more stable in the U.S. than anywhere else since importers do not need to worry about exchange rate fluctuations. Since the U.S. imports a great deal of oil, its markets are heavily reliant on oil and its derivative products (jet fuel, diesel fuel, gasoline, etc.) for their energy needs. As the price of oil can be an important political factor, U.S. administrations are quite sensitive to the price of oil.

Political competitors of the United States therefore have some interest in seeing oil denominated in euros or other currencies. The EU could also theoretically accrue the same benefits if the euro replaced the dollar.

History
The petrodollar system originated in the early 1970s in the wake of the Bretton Woods collapse. President Richard Nixon and his Secretary of State, Henry Kissinger, feared that the abandonment of the international gold standard under the Bretton Woods arrangement (combined with a growing US trade deficit, and massive debt associated with the ongoing Vietnam War) would cause a decline in the relative global demand of the U.S. dollar.[3] In a series of meetings, the United States — represented by then U.S. Secretary of State Henry Kissinger — and the Saudi royal family made an agreement. The United States would offer military protection for Saudi Arabia’s oil fields, and in return the Saudi's would price their oil sales exclusively in United States dollars (in other words, the Saudis were to refuse all other currencies, except the U.S. dollar, as payment for their oil exports).

By 1975, all of the oil-producing nations of OPEC had agreed to price their oil in dollars and to invest surplus oil proceeds in U.S. government debt securities in exchange for similar offers by the U.S.[4]

Political events
In 2000, Iraq converted all its oil transactions under the Oil for Food program to euros,[5] even though the move was deemed by analysts to "fly in the face of financial logic.",[5] since, it meant that Iraq would earn less interest on its oil revenues, which were held in a UN-monitored escrow account in New York. Also, the switch would create "cumbersome new administrative processes" because Baghdad decided to keep also its existing deposits in dollars, which meant that the oil-for-food program would maintain two accounts, one in dollars and one in euros.[5]

After the U.S. invaded Iraq in 2003, Iraq returned the denomination of its oil sales to the US Dollar, despite the greenback's then-fall in value.[6]

The Government of the Islamic Republic of Iran ostensibly takes this theory as fact. As retaliation to this policy, which is seen by Tehran as "neoimperialism",[7] Iran made an effort to create its own bourse, which started selling oil in gold, euros, dollars, and Japanese yen.[8] In mid-2006 Venezuela indicated "support" of Iran's decision to offer global oil trade in the euro currency.[9] Muammar Gaddafi, of Libya had tried to implement the gold-for-oil plan,[10] in 2011, and the introduction of a Libyan gold dinar.

In 2005, William Roberts Clark, Professor and Faculty Associate, Political Science Department, Center for Political Studies, University of Michigan, Ann Arbor, published a work which claimed that a "petrodollar warfare" was under way between mainly the Euro and the United States Dollar waged in the field of world petroleum trade.[11]

Over the years, multiple scholars expressed the view that the Iraq War was conducted to re-assert the dollar hegemony in the wake of Saddam Hussein's attempts to switch from petrodollar in the oil trade and to sell Iraqi oil in exchange for other currencies or commodities.[12][13][14]

https://en.wikipedia.org/wiki/Petrodollar_warfare