What this Article is About?
This article explains how Gulf monarchies play a key role in sustaining U.S. global power. By tying oil to the dollar and investing wealth in U.S. finance and military support, they help maintain American influence in the region. Leaders publicly welcome U.S. officials while overlooking injustices, showing how local power is linked to global networks. Overall, the piece argues that these monarchies act as a foundation for international power rather than independent actors.
In May 2025, Donald Trump returned to the Gulf like a Caesar revisiting his provinces. The red carpets were rolled out, the jets lined up, and the monarchs in flowing robes waited obediently-not as leaders of sovereign states, but as caretakers of empire. Here was the man who called Arabs “ungrateful,” vowed to “bomb Iran into submission,” and openly celebrated Israel’s destruction of Gaza. Yet he was welcomed with smiles, medals, luxury planes and golden swords.
Trump’s, like all American Presidents, demands were simple: keep oil priced in dollars, increase arms purchases, enforce U.S. sanctions on fellow Muslims, and stay silent as Palestine dies. The monarchs obliged. Not one dared to mention the slaughter in Gaza, the siege of Yemen, or the desecration of Al-Aqsa. They did not speak for the Arab people-they surrendered on their behalf.
This was not diplomacy. It was tribute-paid in silence, blood, obedience, and petrodollars.
How Saudi and Gulf Monarchs Underwrite the Petrodollar System
No commodity has shaped the modern international order as profoundly as oil. And no alliance has been more pivotal to America’s financial hegemony than its 1974 pact with Saudi Arabia. Under this agreement, Riyadh committed to pricing oil exclusively in U.S. dollars and reinvesting its surplus revenue into U.S. government debt and Wall Street. In return, Washington guaranteed the kingdom’s political survival and military security.
This arrangement did more than ensure energy stability. It forged a global monetary regime-the petrodollar system-that transformed oil into a financial instrument of U.S. global dominance. Nations across the planet, regardless of their ideological alignment, were compelled to hold dollar reserves to purchase energy. The implications were vast.
As economist Barry Eichengreen writes, “The petrodollar system exported the U.S. monetary base globally, enabling the country to finance both guns and butter with little domestic constraint.” According to the International Monetary Fund (IMF), as of 2024, 88% of foreign exchange transactions involve the U.S. dollar. More strikingly, 59% of the world’s official foreign exchange reserves are held in dollars-despite the United States accounting for less than 15% of global exports (IMF COFER Database; World Bank WITS).
Michael Hudson puts it more bluntly: “The United States gets a free ride from the rest of the world. Other countries produce real goods. America prints money-and oil backs it.”
Any attempt to rupture this arrangement has been met with violence. When Iraq moved to sell oil in euros in 2000, it became the target of one of the most devastating invasions of the 21st century. When Muammar Gaddafi proposed a gold-backed African dinar, his regime was bombed into oblivion. Iran’s continued resistance to dollar dominance has subjected it to decades of crippling sanctions, cyber-attacks, and assassinations.
Through it all, the Gulf monarchs remained complicit. By continuing to price oil in dollars and recycling surpluses into American bonds and markets, they became the invisible hand propping up the very empire that wages war across the Muslim world.
How the Petrodollar Made the Dollar the Global Reserve currency-And Funded a Military Empire
The financial dividends of the petrodollar system flow directly into America’s war machine. Because oil is sold in dollars and those dollars are returned to U.S. capital markets, Washington can finance extraordinary levels of military spending without triggering hyperinflation or capital flight. This is the essence of the so-called “exorbitant privilege”.
The United States today carries a national debt of over $34 trillion, yet its Treasury bonds remain the most sought-after asset in global finance. Foreign governments hold over $7.6 trillion in these bonds, and a significant portion comes from oil-exporting states. Sovereign wealth funds like the Abu Dhabi Investment Authority-managing nearly $900 billion-act not only as passive investors but as stabilizing forces in American markets.
This capital surplus funds more than 750 U.S. military installations in over 80 countries. The most critical nodes of this network lie within the Gulf itself. Al Udeid Air Base in Qatar serves as a launchpad for regional air operations. The Fifth Fleet in Bahrain polices shipping lanes that carry oil priced in dollars. U.S. military personnel are stationed across Saudi Arabia and the UAE in bases constructed and maintained by the host regimes.
Former U.S. Secretary of Defence James Mattis was frank about the connection: “If you lose the dollar as the reserve currency, you lose the ability to wage wars without limits.” That capacity-limitless war, financed through limitless debt-is precisely what the petrodollar enables. And it is what the Gulf monarchies, knowingly or not, underwrite.
