This guy thinks it's a myth - https://www.youtube.com/watch?v=wXbuiTrnqXY.
But:
Although there's no formal treaty enforcing oil sales in USD,
Global oil trade is heavily USD-denominated
That creates persistent structural demand for dollars
This reinforces US financial power (Treasuries, banking system, liquidity depth)
So the US didn’t force the saudis to sell oil only in USD. But the US insistence on dollar oil sales didn’t have to be in the published agreement. It could just have been hinted by an ‘economic hitman’, and the saudis would have understood (‘nice oilfields you’ve got here – it would be a pity if anything happened to them’ etc.). I mean, apart from the US, who else would anybody’s oilfields be in danger from? Maintaining 800 military bases in 80 countries isn’t cheap, which is why they need the dollar to stay the reserve currency and oil payment currency, to increase demand for dollars and allow them to hoover up the world's resources cheaply.
So, although there isn’t an official, enforced petrodollar system, it still exists in reality. A market convention reinforced by global financial infrastructure, rather than a strictly enforced rule.
He says that ‘supporting the dominance of the dollar’ was not a motivation at all, but if you look what happens to countries that decided not to comply with the (mythical) petrodollar system (Libya, Iraq, Iran, Venzuela, Russia, via Ukraine), that doesn’t seem to be true. They seem very keen not to let countries leave the petrodollar system.
Also, AI disagrees (or at least marginalises) with something else he said – that the saudis sold oil in GBP for ‘quite a while’ after the agreement:
there’s no evidence of a meaningful, sustained share of Saudi oil sales being settled in GBP after the mid-1970s, and whatever sterling use existed was transitional and very small, not a parallel pricing system.
After the 1973–74 OPEC pricing shift and the US–Saudi understanding that anchored oil pricing to USD:
Oil pricing internationally consolidated around the US dollar benchmark
Saudi exports were invoiced almost entirely in USD
Global oil trade systems (shipping, insurance, futures, banking) aligned to USD
The UK pound did not remain a pricing or settlement currency for crude oil in any structural sense.
There are a few real but easily overstated sources of confusion:
Transitional invoicing/legacy contracts (early–mid 1970s)
Some older bilateral contracts (pre-fully-standardised USD oil market) could still be settled in non-USD currencies, including GBP
These were being phased out during the mid-to-late 1970s as pricing standardised
But:
This was a legacy clearing residue, not a continuing policy choice.
UK oil imports and refinery accounting
The UK imported crude and sometimes used internal accounting conventions or FX conversions that could involve sterling leg calculations
This is not the same as Saudi selling oil in GBP
It’s more like:
“UK entities converting USD oil payments into domestic accounting units”
FX market settlement mechanics
Even when oil is priced in USD:
banks in London may convert funds through GBP accounts as part of FX operations
that can look like “GBP involvement” but is purely intermediary currency flow
Best historically defensible framing:
1973–1975: brief transitional period where multiple currencies still appeared in residual contracts globally (not just Saudi/UK)
Late 1970s onward: USD dominance becomes effectively complete in oil pricing and settlement infrastructure
So if GBP appeared at all in Saudi oil trade settlement:
it was mostly gone as a meaningful feature by the late 1970s (roughly 1975–1978 window)
What do you think? (I don't know)
