Question regarding oil and dollars. I understand the logic behind petrodollar recycling, where rich oil producers parked their wealth in the US, thereby mitigating US deficits and helping the latter prosper.
But, I am somewhat unclear on oil pricing in dollars. Do the major producers ONLY accept US dollars in payment? I know the Saudis cut a deal with Kissinger regarding this, but how does it work in practice. Must oil be paid for in dollars and what prevents oil producers from taking other currencies?
Thanks,
Jeff