Iran war could end US petrodollar empire

The ongoing aggression by the US and Israel on Iran could lead to the collapse of the US dollar monopoly or ‘petrodollar’ system in the global economy, German-based multinational bank Deutsche Bank has made a sensational prediction.

In a special research report published on Friday (March 27), the bank noted that this war is not just a regional conflict, but it could shake the foundations of the global financial structure that has been in place for decades.

Deutsche Bank researcher Mallika Sachdeva noted in this report that the strategic importance of the Middle East behind the dominance of the dollar as the world’s reserve currency or main reserve currency is immense. She warned that the current conflict has put the stability of the petrodollar system to a severe test. The foundation of the petrodollar system is the historic agreement between the United States and the Gulf countries, through which the dollar is used as the sole medium of sale of oil on the world market and in return the money is reinvested in the United States.

The report also said that this war on Iran could act as a catalyst for the erosion of the petrodollar's dominance. Analysts believe that this war has begun to pave the way for the emergence of the 'petro-yuan' or Chinese currency in the world market as an alternative to the dollar. If the war leads to Middle Eastern countries starting to look for alternatives to the dollar, it will be a major blow to the global financial capacity of the United States.

Source: Middle East Eye.