Oil, dollars, and US power in the 1970s: re-viewing the connections

Petrodollars – the dollars accumulated by oil-producing countries as revenues for oil exports – are usually considered key to our understanding of the renewal and transformation of US power during the 1970s. Yet, in the context of a large and expanding literature, in which the essence of such power is described by terms as diverse as dominance, hegemony, empire or pax americana, scholars hold different views as to the precise nature of the link established between petrodollars and US power at the time. After reviewing the state of the literature, this essay discusses the issue based on declassified documents from US and British national archives by focusing on the way Saudi Arabian authorities allocated their vast oil earnings. While conclusive evidence is still lacking, it appears likely that Saudi choices were shaped by US diplomatic démarches and economic inducements, as well as by US offers of an ambivalent military “protection”.