Petrodollar recycling

1974MajorContested

The U.S. and Saudi Arabia set up a joint economic commission, and Saudi Arabia invests oil surpluses in U.S. Treasuries. Oil money flows through Western banks and dollar markets.

Longest chain: The Big Bang → First stars ignite → Supernovae seed heavy elements → The Sun forms → Earth forms → First oceans → First life → Photosynthesis evolves → Great Oxidation Event → Complex cells (eukaryotes) → Multicellular life → First animals → Cambrian Explosion → First vertebrates → Jawed fish → Fish walk onto land → The amniotic egg → The Great Dying → Dinosaurs appear → Asteroid ends the dinosaurs → Early primates → Apes split from monkeys → Human line splits from chimpanzees → Walking upright → First stone tools → Genus Homo appears → Homo erectus → Control of fire → Habitual fire and cooking → Homo sapiens appears → Complex language → Natufian villages → Oldest known bread → Agriculture begins → Irrigation → Uruk and the first cities → Cylinder seals → Writing (cuneiform) → Babylonian mathematics → Babylonian astronomical diaries → Thales and natural philosophy → Trial and death of Socrates → Plato's Academy → Aristotle's Lyceum → Alexander's conquests → Death of Alexander and the Hellenistic kingdoms → Seleucid Empire founded → Parthian Empire founded → Sasanian Empire → Birth of Muhammad → Muhammad's first revelations → The Hijra → Conquest of Mecca → Death of Muhammad and the Rashidun caliphate → Arab conquests → Abbasid Caliphate → Battle of Talas → Paper reaches the Islamic world → House of Wisdom → Al-Khwarizmi and algebra → Fibonacci's Liber Abaci → Bills of exchange → Medici Bank → Double-entry bookkeeping → Muscovy Company → English East India Company → Seven Years' War → Stamp Act → Boston Tea Party → American Revolution → Declaration of Independence → Articles of Confederation ratified → Shays' Rebellion → U.S. Constitution → Louisiana Purchase → Austin's colony in Mexican Texas → Texas Revolution → United States annexes Texas → Mexican-American War → Compromise of 1850 → Kansas-Nebraska Act → Lincoln elected president → Fort Sumter → U.S. Civil War → National Banking Act → Federal Reserve → Great Depression → Nazis take power → Munich Agreement → Nazi-Soviet Pact → Invasion of Poland → World War II → The Holocaust → State of Israel founded → Suez Crisis → Six-Day War → Yom Kippur War → Oil crisis → Petrodollar recycling

Contested history

Consensus: In 1974 the U.S. and Saudi Arabia set up a joint economic commission and Saudi Arabia began investing oil surpluses in U.S. Treasuries; oil was already priced in dollars.

Confidential U.S.-Saudi arrangement for Treasury purchasesEstablished

Treasury records released in 2016 confirmed Saudi holdings of U.S. debt that had been reported only in aggregate for four decades.

A formal treaty required oil to be sold only for dollarsUnsupported

No such agreement appears in released U.S. or Saudi records; dollar pricing of oil predates 1974.

A 50-year petrodollar agreement expired in June 2024Debunked

The 1974 Joint Commission had no 50-year term and no document supports the expiry claims that circulated in 2024.