security bargain

Petrodollar System Under Strain as Gulf Security Bargain Shifts

The petrodollar system remains deeply entrenched with the US dollar holding nearly 57 per cent of global official reserves versus the yuan's under 2 per cent. However, the security bargain linking Gulf oil revenues, dollar assets and American military protection is weakening. Recent regional developments are converging to expose new strains on this decades-old arrangement that has tied the world's most important commodity to the dominant reserve currency.