Deutsche Bank: The petrodollar system was already under pressure before the outbreak of war.

The petrodollar system is underpinned by three core elements: U.S. demand for oil, oil pricing in dollars, and the security relationship between the Gulf region and Washington. All three are currently under pressure. First, the U.S.'s new status as a net energy exporter means it is no longer heavily reliant on Middle Eastern oil supplies. Second, the dollar-denominated oil market was already deteriorating before the war. Many countries have been striving for years to price energy trade in their own currencies, making some progress, albeit limited. Third—and most seriously—the war has plunged U.S. protectionist policies and the Gulf region's trust in these policies into uncertainty. According to a report released Tuesday by Deutsche Bank on the current state of the petrodollar system, strategist Marika Sahdewa argues that the petrodollar system was already under pressure before the war: most Middle Eastern oil now flows to Asia; sanctioned Russian and Iranian oil is traded in non-dollar currencies; and Saudi Arabia is not only localizing its defense industry but also experimenting with non-dollar currencies for oil payments. (Jinshi)