Name: If You Don't Understand the Petrodollar, You Don't Understand US-Iran War
Uploaded: 2026-03-15T18:02:52.000Z
Duration: 20 min 47 s
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If you don't understand petrodollar, you don't understand why the United States started a war against Iran.

Petrodollar is the main engine of the global economy and the reason why the United States dollar is the global reserve currency.

So if the United States did not start this war, the US Dollar would no longer be the global reserve currency.

And for some people it might seem an exaggeration.

So petrodollar is the agreement that the United States have signed with Middle Eastern countries that Saudi Arabia, UAE and all these nations will be selling their oil exclusively in US dollar.

And that gives a lot of advantage to the United States because if you are now another country and you need a lot of oil, then you have to buy a lot of US Dollars.

And if you come to Saudi Arabia and ask Saudi Arabia, I want your oil, sending Saudi Arabia will say that, well, we want US Dollars for our oil.

Imagine for a moment what kind of a scenario that creates.

You are China and you are trying to industrialize your country.

You want to become the global factory in the world.

But all these factories won't be functioning if you don't have oil.

So as China, even if you absolutely hate the United States, you have no other option but to buy a lot of US Dollars.

Because without US dollars, you don't have oil.

And that there is so much demand for US dollars by Japan, by China, by European countries and by all other nations.

So that creates something that we call a petrodollar loop.

Countries need to buy a lot of oil because without oil they don't have economies.

But to buy oil, they need a stockpile of US dollars.

You need to buy millions of barrels every single day.

So in order for you to pay for this oil every single day, you are going to keep a lot of US Dollars because you have to make these payments every single day.

By having so much stockpile of US Dollars that it instantly creates inflation.

Inflation is basically that the dollar continuously starts losing its value because that is how paper money is designed.

So imagine you have $100,000 in your bank account and a year has passed and, and

you might think, oh, I did a good job, I did not spend that hundred thousand dollars on some crap that I don't need.

So your hundred thousand dollars lost 3% of its value.

Or you just lost $3,000 even though that you haven't spent a single dime of that money.

And that's why smart people always invest their money.

Because they don't want to lose their money to inflation.

And that's why if you haven't started yet, of course, join the investing academy.

So the same thing is being done by all these nations that are keeping a lot of US Dollars.

Where are you going to invest hundreds of billions of dollars of US Dollars?

You can't just go to the stock market because the stock market is volatile.

As a long term investor you go there, but

you need that money every single day to pay for that oil.

So you are going to go and loan that money to the United States government by buying U.S.

U.S. treasury market is the world's largest market.

Because all these nations, they need to keep stockpile of US Dollars to buy oil.

But because they are going to lose that money to inflation, they will loan it to the US Government in form of debts.

Because they will be receiving interest by loaning that money to the US Government, the US Government will take that money and it will be spending that money on the United States.

Every dollar that is spent on the economy is someone's income.

So let's say you go to a restaurant and you treat yourself with a very nice meal for a hundred bucks.

That 100 bucks went to the owner of that restaurant.

Now he takes that money and pays the waiter.

The waiter takes that money and let's say he gets flour for his wife.

So that money circulates within the entire economy and the economy grows faster.

So the more the US Government spends on the that money on the US economy, the faster the US Economy grows and the more the US Economy can maintain the world's largest military.

And that is the main reason why the United States has the world's largest gdp.

Because there is so much demand for the US Dollar, which means everybody wants to loan their money to the US Government.

The US Government spends that money and that's why it turns into this never end cycle that the US Economy keeps growing.

Now since the US Economy have grown larger, the US economy pays interest to these nations because they're holding US Debt.

Now what do you think these countries will do with that interest payments they have received from the US Government?

So because they need oil, they need a stockpile of US Dollars.

Because they need so much US Dollars to pay for that oil.

And because there is inflation that will crush their US Dollars value, the they will Buy more US debt.

So essentially the entire economy turns because of this petrodollar loop, into a loop where money keeps coming to the United States and invested in the United States.

And the US Economy keeps growing and growing and growing.

So essentially the United States, with the help of Middle east or by controlling the Middle Eastern oil, has created a scenario where all the wealth in the world will be coming to the United States.

And for them to get oil, they need US Dollars.

This is the perfect strategy to build the world's greatest economy.

And that's why the United States is not afraid to borrow as much money as they want.

The United States itself is one of the largest oil producers in the world and Middle east as well.

So together they account for 60% of the global oil.

There are countries such as Russia that can easily sell their oil in non US Dollars.

There is Venezuela and there are other nations, right?

So if you want to, if you want the world to buy oil exclusively in US dollars, you don't have to go and start a nuclear war with Russia.

All you have to do is to ensure that the global oil prices are set in US dollars.

And the way you do that is by ensuring that most of the oil globally is being sold in US dollars.

So if 60% of oil is being sold in US dollars, that sets the global benchmark.

So nations such as Russia that might not like to sell their oil in US Dollars will have to follow along.

Because every single time they will be converting currencies from US Dollars to their own currencies or to different currencies, they will be losing money.

So even though that Russia might not want to sell its oil, for example, in US dollars, now it is in their interest to sell oil in US Dollars because the United States alongside with Middle east have set the global benchmark in US Do.

And that's why if you look at oil prices, we always track oil prices exclusively in US Dollars.

Since the United States is the global reserve currency or why the US Dollar is the global reserve currency.

So if you're a central bank in India or China or the uk, which currency are you going to hold as a reserve currency?

A currency of a nation that is not backed by anything or the US Dollar that can always be converted into oil and your economy always needs oil, of course you are going to keep US Dollars.

Do you see how petrodollar is the reason why the dollar is the global reserve currency?

And that is why the United States can maintain a 40 trillion dollar debt.

Now an average person would look at all of this and is like, wait a second.

If the United States has so much debt and we know mathematically like we can do the math, we know that the United States will never pay off its debts, why aren't these countries selling the US Debt?

Why the world keeps loaning money to the US Government?

Because the world understands that the dollars can always be converted to oil and we always need oil.

So because we always need oil and the world needs oil.

The US Dollar is backed by a real commodity that the world needs and the world is competing to buy more dollars.

So right now, Japan, China, South Korea, European nations, whatever other nations are all competing to buy dollars.

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If You Don't Understand the Petrodollar, You Don't Understand US-Iran War

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