Geopolitics of Energy
The Petrodollar System and Shifting Alliances
The global oil trade has historically been denominated in US dollars (the "petrodollar" system), giving the US significant leverage over energy markets and the countries that depend on them. This leverage enables tools like sanctions, secondary tariffs, and "waivers" — the very language of the Russian oil waiver. However, the rise of alternative payment mechanisms (India-Russia rupee-ruble trade, China's petroyuan), BRICS expansion, and multipolar energy relationships are gradually eroding this unilateral dominance.
- India and Russia have established rupee-ruble trade mechanisms to circumvent dollar-based sanctions
- Saudi Arabia has signalled openness to accepting non-dollar payments for oil
- BRICS nations account for approximately 40% of global GDP and a significant share of oil trade
- India's UPI-based cross-border payment system could facilitate non-dollar oil transactions
- The US dollar's share of global foreign exchange reserves has declined from ~70% (2000) to ~59% (2024)
● Tracked since March 06, 2026 · last seen April 15, 2026 · updates as the daily brief publishes
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