India and UAE Break Petrodollar Dominance with Landmark Rupee Oil Deal
India and the United Arab Emirates have completed their first oil trade without converting currencies to dollars, using the Local Currency Settlement (LCS) system established by a Memorandum of Understanding (MoU) between the two countries. The LCS system allows bilateral trade using the rupee and dirham, reducing costs and speeding up transactions. This move away from the dollar in global oil trade could have negative implications for the United States, as the majority of global oil sales are currently priced in dollars, ensuring constant demand for the currency. Other countries, such as Saudi Arabia, have also expressed openness to discussing trade in currencies other than the US dollar. While the dollar's role as the world reserve currency is not immediately threatened, the trend of de-dollarization could pose challenges in the future.