The Myth of the Petrodollar: How Oil Markets Shape Currency Values In 1973, a series of events led to an arrangement between major oil producing nations and the United States that fundamentally altered the global currency landscape.
The Organization of Petroleum Exporting Countries (OPEC) declared an embargo on oil exports to countries supporting Israel in the Yom Kippur War, causing a sharp increase in oil prices.
In response, Saudi Arabia agreed to sell its oil exclusively for dollars, marking the beginning of the petrodollar system.