Beyond Oil: A History of Leaders Who Challenged the Petrodollar
The global economic order has been profoundly shaped by the “petrodollar” system, established in the 1970s after the collapse of the Bretton Woods agreement. Under this system, the United States secured an agreement with Saudi Arabia to price oil exclusively in US dollars, ensuring a steady global demand for the dollar and reinforcing its status as the world’s primary reserve currency.[1]
For Washington, the petrodollar system is not merely an economic policy—it is a strategic imperative. Leaders who have attempted to challenge this system by selling oil in currencies other than the dollar have often faced severe consequences. Below are three notable cases, with verified sources and context.
Muammar Gaddafi (Libya)
The Challenge
Gaddafi proposed the creation of a pan-African gold-backed currency, the “gold dinar,” intended to replace the US dollar and the French-backed CFA franc in African oil and commodity transactions.[2]
The Fate
Gaddafi was overthrown and killed in 2011 during a NATO-led military intervention, with significant US involvement.
The Context of US Influence
While the intervention was publicly justified as a humanitarian response to the Arab Spring, declassified emails from Hillary Clinton’s private server revealed that French President Nicolas Sarkozy was motivated by concerns over Gaddafi’s gold dinar plan.[3] However, it is worth noting that the emails originated from Sidney Blumenthal, whose Libya intelligence was considered by US officials to be of “dubious reliability and provenance.” This adds complexity to assessing how much weight the currency factor truly carried in the decision to intervene.[3a]
Saddam Hussein (Iraq)
The Challenge
In 2000, Iraq switched the currency for its oil sales under the UN Oil-for-Food program from the US dollar to the euro.[4]
The Fate
Saddam Hussein was overthrown in the 2003 US-led invasion of Iraq and later executed.
The Context of US Influence
The invasion was justified by claims of Iraqi weapons of mass destruction (WMDs) and ties to terrorism. Some economists and geopolitical analysts argue that Iraq’s shift to the euro was a contributing factor.[5] It should be noted, however, that this remains a minority view among mainstream historians and political scientists; the official casus belli remained WMDs and terrorism links. Following the invasion, the US reinstated the dollar for Iraqi oil sales.[5a]
Nicolás Maduro (Venezuela)
The Challenge
Since 2018, Venezuela has sought to reduce its reliance on the US dollar by accepting other currencies—such as the euro, yuan, and its state-backed cryptocurrency, the Petro—for oil sales.[6]
The Fate
Maduro’s regime remains in power but has faced intense destabilization, including hyperinflation, US-backed sanctions, and international isolation. The Petro cryptocurrency was officially discontinued in January 2024 following a corruption scandal involving crypto assets used for oil operations.[6a] Its failure was due to a combination of US sanctions and internal mismanagement.
The Context of US Influence
The US has imposed sanctions aimed at forcing regime change and maintaining control over Venezuelan oil.[7]
Conclusion
While there is no definitive “smoking gun” evidence proving that the US has acted solely to defend the petrodollar, the historical pattern is notable. Leaders who have challenged the dollar’s dominance in oil markets have faced invasions, regime change, or destabilization campaigns. The petrodollar system remains central to US strategic interests, and challenges to it are treated seriously by Washington.
Notes and Sources
- The petrodollar system was established in the 1970s after the US ended the gold standard. Following the Nixon Shock of 1971, the US secured an agreement with Saudi Arabia to price oil exclusively in dollars, creating perpetual global demand for the currency. Source
- Gaddafi’s proposal for a gold-backed currency was seen as a threat to Western financial dominance in Africa. As President of the African Union in 2009, he called upon African oil producers to sell oil in gold dinars, which would have provided Francophone African countries an alternative to the French-backed CFA franc. Source
- Declassified emails revealed that Gaddafi’s gold dinar plan was a significant concern for France and the US. A 2011 email to Hillary Clinton stated that Gaddafi held 143 tons of gold intended to establish a pan-African currency, and that French President Sarkozy’s push for war was motivated by concerns over this plan supplanting France as the dominant power in francophone Africa. Source
- However, the sourcing is complex: the information came from Sidney Blumenthal, whose Libya intelligence was considered by US officials to be of “dubious reliability and provenance.” Fact-check context
- Iraq’s decision to price oil in euros was a direct challenge to the petrodollar system. In October 2000, the UN Security Council’s sanctions committee authorized Iraq to receive oil-export payments in euros rather than dollars under the Oil-for-Food program. Source
- Following the 2003 invasion, the US reinstated the dollar for Iraqi oil sales. Some analysts argue that Iraq’s euro switch was a contributing factor to the invasion, as a broader shift by OPEC countries to euro pricing would have seriously threatened dollar hegemony. Source
- This remains a minority scholarly view; the official casus belli remained WMDs and terrorism links. Same source
- Venezuela’s efforts to bypass the dollar included the creation of the “Petro” cryptocurrency in 2018, backed by the country’s oil reserves, intended to provide alternative international financing in the face of US sanctions. Source
- The Petro failed to gain traction and was officially discontinued in January 2024. Its failure was due to both US sanctions and internal corruption/mismanagement. Same source
- The US has used sanctions and diplomatic pressure to isolate Maduro’s regime. In recent years, countries including Russia and Saudi Arabia have signaled openness to trading oil in currencies other than the dollar, reflecting broader geopolitical shifts away from dollar dominance. Source
All sources were last accessed and verified in February 2026.