From Open Democracy
''Setting the doubtful nuclear threat aside for a moment, it might be useful to consider if more is at stake in this brewing conflict. In this regard, the petrodollar warfare theory has a lot of explanatory potential.
The basics of the theory go as follows. Since 1945, the US dollar has been the de facto international reserve currency for global oil transactions. In 1971 President Nixon took the dollar off the gold standard, which gave the US—through the Treasury Department, which enjoys a monopoly of control over the US money supply—immense monetary power . On the other side of the global oil arena, the Organization of Petroleum Exporting Countries (OPEC) largely decides which currency is used for OPEC oil purchases. Two secret agreements between the US and Saudi Arabia ensured Saudi support in OPEC for the pricing of all oil in dollars. As a consequence, US petrodollars became the de facto currency for global oil transactions, leaving all producers with their profit in dollars. These dollars are then recycled through OPEC back into the US through Treasury Bills or other dollar-dominated assets. This in turn creates capital-accounts surplus for the US economy which finances the US trade deficit.''
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