Petrodollar (Petro-dollar) refers to the surplus funds from the cashbackforexreviewcreased premiumrebateforex revenues of oil-exporting bestforexrebaterates in the mid-1970s due to the significant increase in oil prices, after deducting the funds used to develop their economies How Forex Rebates Work other domestic expenditures Since oil HowForexRebatesWork denominated and settled in dollars on the cashback forex market, some people also refer to all oil revenues of oil-producing countries collectively as petrodollars The current petrodollar dollars is estimated at $800 billion to $1 trillion, making it a huge and impressive force in the international capital market The 1973 war in the Middle East led to a significant increase in oil prices, creating a worldwide energy crisis In October 1977, the Organization of Petroleum Exporting Countries announced that the price of oil had been raised from $3.011 to $5.11 per barrel A little later, it was raised again to $11.65, resulting in In October 1977, the Organization of the Petroleum Exporting Countries (OPEC) announced that the price of oil would be raised from $3.011 to $5.11 per barrel, and then to $11.65 again, resulting in a major change in the balance of payments structure of the world. These changes are manifested in: the balance of payments of oil-exporting countries showed a huge surplus due to the great increase in oil export revenue; while the balance of payments of oil-consuming countries showed a huge deficit due to the sharp increase in oil import expenditure. The developed countries suffered a more serious blow, the current balance of developed countries due to the price increase of oil and more show a huge deficit, on the contrary, the current account of the oil-exporting countries is a huge surplus this is the petrodollar for the size of such funds, there are various estimates, according to the general projection, in 1974 the oil-exporting countries of the total income from oil exports of about 115 billion U.S. dollars, its current input is about 40 billion U.S. dollars. This surplus, on the one hand, represents the decrease in foreign exchange of oil consuming countries, which is the main reason for the huge deficits in the balance of payments of some developed countries, and on the other hand, it means that oil exporting countries are rich in petrodollars. For the oil-exporting countries, due to the huge income of petrodollars and the small domestic investment market, they cannot fully absorb so many dollars and must use them abroad in the form of capital export. Therefore, most of the industrial countries hope that the petrodollars will flow back to the oil-importing countries from the oil-exporting countries, which has led to the return of petrodollars. However, this huge amount of petrodollars has brought turbulence to the international financial markets. Petrodollars are mostly international short-term funds by nature, which may move in a large and rapid manner internationally, and this movement will seriously affect the stability of international financial markets, therefore, countries all over the world are closely watching the movement of petrodollars. Since the 1980s, international oil prices have been on a rising trajectory, but the worlds average daily oil production has not exceeded the level of the 1970s From 1999 onwards, the oil export revenues of OPEC countries showed a strong increase again with the rising oil prices, and by 2005, the annual oil revenues of OPEC countries exceeded $500 billion Therefore, the current international capital The scale of nearly trillions of petrodollars in the international capital market, therefore, simply means that after 30 years, the net oil exporters have profoundly changed the distribution pattern of global output, and they have shared a bigger piece of the cake, thats all, and this piece of cake means the transfer of benefits from the net oil importers to the exporters According to the relevant statistics, last year the global including the Organization of the Petroleum Exporting Countries (OPEC), and the worlds second largest oil exporter Russia and According to estimates by the International Monetary Fund (IMF), the real oil revenues of oil-exporting countries were close to $800 billion in 2005 alone, much higher than the $330 billion in 2002 According to estimates by the Bank for International Settlements, between 1998 and 2005, OPEC countries received an additional $300 billion in oil export revenues from oil prices. The additional oil export earnings from rising oil prices exceeded $1.3 trillion Considering that OPEC countries marginal propensity to import is only about 40 percent and their own financial systems are underdeveloped, coupled with the petrodollar surpluses of non-OPEC oil-producing countries, it is entirely possible that the resulting increase of nearly a trillion dollars in international capital markets will have an economic impact Now, Western economic experts are very concerned about how the huge amounts of petrodollars will be The experts say that petrodollars will either be spent or saved If oil-exporting countries use petrodollars, then they will expand their imports from other countries and thus maintain global demand But it appears that they will not spend much money, preferring instead to maintain higher savings rates than oil-importing countries The UAE and Kuwait have savings rates of up to 40% of GDP Thus, oil-consuming countries The shift of income to oil-producing countries will lead to a slowdown in global aggregate demand, with adverse effects on the world economy If oil-exporting countries use large amounts of petrodollars for savings and invest them in global capital markets, they can finance the current account deficit of oil-importing countries, which in effect amounts to borrowing money to allow importing countries to consume high-priced oil But this increases the demand for foreign financial assets, which raises asset prices and depresses oil Experience shows that large amounts of petrodollars can be both good and bad for the economies of oil-producing countries, and the question is how to use and save them. The emergence of the petrodollar has had a huge impact on the world economy and international finance: first, it has provided oil-producing countries with abundant funds, promoted the development of the economies of these countries, changed their long-standing single economic structure, and gradually established an independent, autonomous and complete national economic system; second, it has caused new imbalances in the balance of payments of different types of countries, and the comparison of international reserve power has undergone structural changes. Structural changes have taken place for example, oil power Russia has earned more petrodollars due to the rise in oil prices Russian oil export revenues are expected to be about $90 billion in 2005 As of September 18, 2005, Russia not only repaid its huge foreign debt to the Paris Club ahead of schedule, but also raised its gold and foreign exchange reserves to $149.754 billion Third, it has intensified the turmoil in the international financial markets Oil After the dollar was put into the international market, on the one hand, it enriched the international credit power and met the needs of many countries for long and short term credit funds; on the other hand, it caused a large amount of free money to flow between countries, sometimes investing in stocks, sometimes investing in gold and national currencies, leading to more volatile stocks, gold and foreign exchange market uncertainty ring current petrodollar ring current is a unique international political economy that has long attracted attention. It is generally believed that the U.S., by virtue of its political and economic supremacy after the war, has made the dollar the most important international reserve and settlement currency, and as a result, the U.S. has been able to print money to produce large amounts of U.S. dollars and purchase goods and services around the world, while other countries need to exchange their exports for U.S. dollars to make foreign payments, and because of the dependence of many countries on imported oil, they must pay a The remaining petrodollars of the oil exporting countries need to find investment channels, and because the United States has strong economic strength and developed capital markets, petrodollars are turned into U.S. bank deposits and securities assets such as stocks and treasury bonds in the form of return flows to fill the U.S. trade and fiscal deficits, thus supporting the economic development of the United States with its special economic and financial The United States, with its special economic and financial status, maintained the petrodollar ring-flow, so that the United States for a long time to present consumption expansion foreign trade deficit and a large number of foreign capital absorption and coexistence of the situation, the U.S. economy can also be in this special pattern of growth in the petroleum-based monetary era is similar to the gold standard, but different from the gold standard monetary era, gold as the local currency, with unlimited legal capacity, bank notes can be freely converted into gold coins anyone can apply to the national mint to mint all their gold into gold coins. Anyone can apply to the national mint to mint all their gold into gold coins or dissolve gold coins into metal blocks. Oil-producing countries provide obligations (oil), as long as the United States force can still conquer the world, you hold the dollar can be exchanged for anyones oil resources by locking oil, Americans enjoy the right to fill out dollar checks for debts, have the obligation to maintain the credit of the dollar and dollar force as long as the worlds crude oil is still traded in dollars, the oil-based dollar will not collapse once the right to exchange dollars for oil is violated The U.S. has the obligation to maintain the dollar force (deterrence) so although the Kuwait and Iraq wars cost the U.S. huge manpower and resources but all activities that challenge the oil standard must be cracked down on, so the U.S. is not striking them for no reason the dollar either fails because the U.S. force is not enough to protect the oil standard or the dollar credit is not enough to fail, in actual international activities, failure by force is almost impossible because As long as there is the oil standard, the United States has the power to gather the world to fight any challenge to the oil standard of all activities so the dollar is difficult to collapse quickly, most likely long-term weathering, the dollar credit continues to challenge the limits of tolerance, but no one has the ability to use global power, but the gradual weakening of the consequences can be expected, all of the dollar will not be the final repayment obligations of the dollar to go completely weak after the It is unlikely that there will be any more false credit checks to rule the world, but it is just an idea that people generally expect now.