[lbo-talk] Oil & dollars

jeff sommers sommers at apollo.lv
Wed Feb 16 11:21:12 PST 2005


Hello!

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



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