Opinion piece. If it doesn't fit here, please move it to the other thread
The Iran War Just Broke the Petrodollar
The Iran War Just Broke the Petrodollar
- The virtuous loop that has seen America underwrite stability in the Middle East in exchange for Gulf states recycling their dollar revenues into US Treasuries has been broken.
- Foreign central banks have been net sellers of Treasuries for consecutive weeks, with holdings at the Federal Reserve Bank of New York dropping by roughly $82 billion to $2.7 trillion.
- The US-Israeli war with Iran has fractured the petrodollar loop at both ends, with oil-importing nations selling Treasuries to limit depreciation and Gulf producers unable to export oil due to the Strait of Hormuz closure.