dilloduck
Diamond Member
Oil is denominated in US Dollars because we are the largest consumer and importer in the world. Denominating it in dollars makes for the lowest overall transaction cost. If China surpasses us, it will be denominated in Yaun.
Are you saying that OPEC's deal with America that ties oil sales to the dollar is only because America uses more and not because of any deal struck with the Saudis?
I have no idea what deals may or may not have been struck. I am only saying it is natural for a commodity to be denominated in the currency of the largest consumer of the commodity. It minimizes transactions costs.
As of now even the Chinese have to use dollars to buy oil from OPEC .