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Valuation of metals

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2014 Why valuation of gold, silver ,Petroleum products is done in terms of dollars..when 50% of petroleum products comes from middle east countries.........

Nikhil Kaushik

Nikhil Kaushik (Expert)
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10 June 2014 well whether you believe it or not, till 1960s Indian Rupee was the dominant currency in middle-east.

US has followed a concept called dollar diplomacy since 20th century to establish economic dominance over the world.

while you are correct that substantial portion of petroleum products are from middle-east, these countries don't have the technology to harness these oil resources. US contractors do most of the oil drilling in this area.

for diamonds, another high-end product, US is the world's largest consumer. This helps US in demanding pricing in USD terms.

plus, given that world-wide USD is now the main currency for world trade, US is in unique position to decide the terms of the trade including the currency.

you may refer https://en.wikipedia.org/wiki/Dollar_diplomacy

https://www.vdare.com/articles/dollar-diplomacy-outsourcing-and-the-iraq-war

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