A new analysis by Deutsche Bank states that a military conflict between the US and Israel against Iran could accelerate the weakening of the so-called petrodollar and question its role as a key element of the US's global financial influence. The topic was also commented on by “Middle East Eye“, reports News.bg.
According to researcher Malika Sachdeva, the strategic role of the Middle East for the dollar's position as the world's reserve currency is often underestimated. She warns that the current situation could test the foundations of the system on which the petrodollar regime is built.
Historically, the petrodollar arose from agreements between the United States and the Gulf states, in which oil is traded in US dollars, and the proceeds are reinvested mainly in the US economy. A significant part of these funds is directed to the purchase of US government bonds, which helps maintain low interest rates.
Countries such as Saudi Arabia, the UAE, Kuwait, Qatar and Bahrain maintain a peg of their currencies to the dollar, which obliges them to hold significant foreign exchange reserves in US currency and further strengthens the dollar's position in the global financial system.
The report emphasizes that the long-term stability of this system also depends on the role of the US as a security guarantor in the region. Sachdeva points out that any failures in this function could undermine confidence in the petrodollar mechanism.
According to the analysis, tensions around key strategic routes such as the Strait of Hormuz further increase the risk for global oil trade and call into question the established balance of influence in the region.
Sachdeva adds that deteriorating security in the Persian Gulf could lead to a redirection of financial flows and a reduction in dependence on the dollar in the long term.
The Deutsche Bank report summarizes that such dynamics could become a catalyst for weakening the dominance of the petrodollar and potentially the beginning of broader changes in the global monetary system.