Saudi Black

In 1971, President Nixon suspended the dollar’s convertibility into gold paving the way to link oil to the dollar through a military/energy deal with the Kingdom of Saudi Arabia. This deal cemented the dollar’s position as the global reserve currency for the next 50 years ensuring global oil trade was transacted in dollars. Russia’s recent barring from the SWIFT payment system has encouraged other countries to start buying and selling oil in other currencies weakening the dollar’s reserve status. As the world moves away from oil sales denominated in dollars and oil itself as an energy resource, this historical piece stands as a reminder of the intrinsic link between money and energy and the dangers and damage of letting one nation determine the link.