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→Impact of the 2026 Iran war and closure of Hormuz Strait
===Impact of the 2026 [[Iran war]] and closure of [[Hormuz Strait]]===
===Impact of the 2026 [[Iran war]] and closure of [[Hormuz Strait]]===
The petrodollar system became essentially a protection racket for oil-producing countries in the [[Middle East]] aligned with the [[US]], such as [[Saudi Arabia]], [[Kuwait]], the [[United Arab Emirates]] (UAE), [[Bahrain]], and [[Qatar]]. The US [[military]] supposedly granted "[[security guarantee]]s" to these countries in exchange for their agreement to denominate oil sales in [[US dollar]]s and recycle the dollars into the [[US Treasury]] [[market]] to finance the US [[federal government]] [[budget deficit]], thereby creating [[demand]] for the US dollar outside the [[United States]] and helping keep [[interest rate]]s lower than they otherwise would be.
The petrodollar system became essentially a protection racket for oil-producing countries in the [[Middle East]] aligned with the [[US]], such as [[Saudi Arabia]], [[Kuwait]], the [[United Arab Emirates]] (UAE), [[Bahrain]], and [[Qatar]]. The US [[military]] supposedly granted "[[security guarantee]]s" to these countries in exchange for their agreement to denominate oil sales in [[US dollar]]s and recycle the dollars into the [[US Treasury]] [[market]] to finance the US [[federal government]] [[budget deficit]], thereby creating [[demand]] for the US dollar abroad and keeping [[interest rate]]s lower than they otherwise would be.
Any country that needed Persian Gulf oil needed US dollars to buy the oil. [[Congress]] constantly looked for any excuse to inflate the US monetary base to [[export]] dollars to meet global demand for dollars.
Any country that needed Persian Gulf oil needed US dollars to buy the oil. [[Congress]] constantly looked for any excuse to inflate the US monetary base to [[export]] dollars to meet global demand for dollars.