One Of The World's Largest Energy Majors Sees No Reason For Petrodollar

Most of the world buys energy and commodities with the Dollar. This is considered the world reserve currency, basically the U.S. tends to protect the worlds largest oil producers in the world if they price there oil in U.S. dollars. This is considered the petrodollar system by evidence that countries such as Saudi Arabia and Kuwait receive protection and Iran and Syria who sell in other currencies don't. There is an ever increasing demand for the U.S. Dollar due to increasing demand for world energy. If that demand begins to decrease due to de-dollarization the effects of over printing the U.S. currency will begin to be felt just like a country who does not have world reserve currency status, inflation and hyperinflation could become a possibility. The petrodollar system replaced the gold convertibility of the dollar in the early seventies. The U.S. is really beginning to piss off the world as evidenced by more and more articles like the one below. 

The US dollar is still the world's most widely held reserve currency, accounting for nearly 33 per cent of global foreign exchange holdings at the end of last year, according to IMF data. That ratio has been declining since 2000, when 55 per cent of the world's reserves were denominated in US dollars. It does seem to be the goal of the U.S. to maintain the free flow of oil and energy at market prices and be priced in U.S. dollars.

Zerohedge.com

Submitted by Tyler Durden on 07/05/2014

The USA is fast running out of friends to support its 'exorbitant privilege'. Having alienated the Germans over NSA-eavesdropping, 'boomerang'd the Russians into de-dollarization, tariffed and quantitatively eased China into diversification, and finally 'punished' France into discussing the dollar's demise; it appears no lessor person than the CEO of Total (the world's 13th biggest oil producer and Europe's 2nd largest), believes "There is no reason to pay for oil in dollars." Clearly, based on Christophe de Margerie's comments, that we have passed peak Petrodollar.


As Reuters reports,

Oil major Total's chief executive said on Saturday the euro should have a bigger role in international trade although it was not possible to do without the U.S. dollar.

Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.

"There is no reason to pay for oil in dollars," he said. He said the fact that oil prices are quoted in dollars per barrel did not mean that payments actually had to be made in that currency.

French Finance Minister Michel Sapin said on Thursday that euro zone finance ministers would discuss ways of boosting use of the euro in international trade in their next monthly meeting on Monday.

"It would be a way to protect businesses when, outside of U.S. territory, they carry out transactions that are perfectly legal in the country they belong to," he said.
So even a major beneficiary of the status quo appears to see the end in sight for the Petrodollar.

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