Professor Liu Ling of Youshi University in China believes that "the US dollar is an international currency, and the US dollar actually undertakes the three functions of global trading medium, value storage and pricing unit." In terms of transactions, more than 4/5 of the world's foreign exchange transactions and more than half of the world's exports are denominated in US dollars. In terms of reserves, two-thirds of the world's official foreign exchange reserves are served by US dollars. From the pricing point of view, at present, almost 100% of international oil transactions are denominated in US dollars, and the global oil trade exceeds 600 billion US dollars every year, accounting for 10% of the total global trade.
The low interest rate and weak dollar policy adopted by the United States to alleviate the subprime mortgage crisis directly brought about the flood of liquidity, and the continued depreciation of the dollar led to the skyrocketing prices of bulk commodities including crude oil. Driven by the loose monetary policy of the United States, the international crude oil price reached an all-time high of $0/47 per barrel in July 2008. In the context of the financial crisis hitting the real economy hard, oil prices quickly fell to $35. "(The United States) loose monetary policy leads to the flood of liquidity, and the flood of liquidity and strong economic growth lead to the skyrocketing price of crude oil; The financial crisis led to insufficient liquidity. When liquidity is insufficient, the real economy will decline, and the oil market will be affected by the US dollar pricing mechanism, resulting in a sharp drop in crude oil prices. " The sharp rise and fall of oil prices seems confusing, but behind it is actually that the United States is manipulating oil prices according to the needs of domestic economic interests and global interests.
Although the United States has not announced that the dollar is directly linked to oil, it has ensured the hegemonic position of the dollar in the international monetary system by monopolizing the trading pricing power of commodities such as oil. This is the most essential relationship between the dollar as an international currency and the pricing mechanism of petrodollars. First of all, the U.S. Treasury can print dollar bills locally and buy oil on the global market with little success. The virtual symbol of the dollar, exported in exchange for real money and silver oil resources. This is the privilege of the United States and the dollar, and it is achieved through the hegemony of the dollar in the international monetary system. Secondly, the United States can influence and control oil prices according to the needs of domestic economic interests and global interests. Since oil transactions are denominated in dollars, any country must buy oil in dollars, so that the United States can influence and manipulate international oil prices through domestic interest rate adjustment and dollar exchange rate policy.