Petrodollar and De-dollarization: A Survey from OAPEC Countries

Abstract

The study investigates reducing dependence on the dollar as a supreme currency for oil trade and the basis of the global monetary system and analyses the state of the dominance of the US dollar as an exchange currency in the global oil market. According to an exploration of AOPEC (Organization of Arab Petroleum Exporting Countries) countries’ views on the petrodollar after the second shock of globalization, since the second quarter of 2022, with the start of the war in Ukraine, the world order has witnessed an economic war alongside a conventional war. The study created a questionnaire in Arabic for professionals and academics in several Arab oil-exporting countries in the first quarter of 2023. According to the results of the questionnaire analysis, participants hold differing opinions. The global oil market is ready to abandon the petrodollar; the weight of giving up the petrodollar will be more than 50% of the oil market; it will most likely take three to five years. Russia and China are attempting to undermine U.S. control over the global monetary system for political reasons; US efforts to impose the Russian oil price cap are a source of systematic risk to them; Russia’s and China’s governments employ a wide range of strategies to stop that; on the other hand, the currency diversification policy that oil-exporting countries follow in order to preserve their oil revenues has become a necessity to avoid or reduce the risks of imported inflation and additional fluctuations in the value of the US dollar.