ROOKE: America’s Superpower Status Dealt Another Blow Under Joe Biden

Photo by MANDEL NGAN/AFP via Getty Images

Mary Rooke Commentary and Analysis Writer
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While President Joe Biden’s foreign and economic policies have slowly eroded the U.S.’s superpower status, the final blow will come if Saudi Arabia exits the 50-year petro-dollar deal with the U.S.

Since the 1970s, Saudi Arabia has sold its crude oil in U.S. currency under the petro-dollar agreement, which is a massive contributor to the U.S. dollar’s international standing.

This deal forces foreign countries to keep reserves of U.S. cash on hand to pay for their energy brought in from Saudia Arabia. With the agreement expired (happened on June 9, 2024), Saudi Arabia is free to sell its oil in any currency, including the Chinese Yuan and Euro.

While Saudi Arabia hasn’t officially announced an end to using the U.S. dollar, it can’t be understated what this will do to the U.S. internationally and Americans at home if the deal is not renewed.

If the dollar is no longer the world’s reserve currency for these purchases, our country’s power to influence the market rate for American imports is almost zero. The U.S. economy relies heavily on foreign countries’ need for U.S. dollars to purchase oil, not just for cheaper imports. The U.S. Treasury bonds can only support low interest rates because of the global demand for the dollar. Add in the immediate spike in prices at the pump along with the rise in cost for all goods and services, and Americans are looking at, at least, a depression.

The economy can’t handle any more shocks to the system. This major problem doesn’t seem to be getting enough attention.