This is the end of the petrodollar
The deal was that the US would provide the GCC ruling families with military support. In exchange, the ruling families promised to sell their oil in USD and recycle their vast surpluses into US assets.
This was crucial for the US, as it had just defaulted on the world by ending the convertibility of USD to gold. With the petrodollar in place, the USD was now backed by oil – the lifeblood of our economy.
Now the first war has broken out, the GCC nations have quickly realized that this was a one-sided deal. Allowing US military bases on their soil and letting the US use their airspace and land to launch attacks against Iran has put a target on their backs.
Instead of being defended, the US pulled air defense equipment out of the GCC to defend Israel, and now they are being threatened to join the war against Iran or face consequences.
Iran is in full control of the Strait of Hormuz and is letting ships through if oil is paid in yuan, not in USD. A decoupling from the US with new defense alliances makes sense for the GCC.
This would mean less demand for dollars, less demand for Treasuries, less demand for US equities at a time in which the US badly needs it.
Not just West Asia, but Japan, South Korea and Europe are realizing that having US bases is a safe as sleeping with an attack-dog who dreams violent dreams. And the attack-dog will only protect Israel anyway. https://t.co/TEaRSAEILe
— Elftown Community (@OfficialElftown) March 30, 2026