Petrodollar

Petrodollar refers to US dollars earned from crude oil exports. It's a term used to describe the phenomenon where oil-producing countries sell their oil primarily in US dollars, leading to a significant global demand for USD.

Petrodollars matter because they contribute to the USD's status as the world's primary reserve currency. This status provides the US with several economic advantages, such as lower borrowing costs and global acceptance of the USD for international transactions. For instance, in 2020, around 80% of global oil trades were denominated in USD, illustrating the petrodollar's significant influence on the forex market.