Petrodollar Strain, US Waiver
- Treasury Secretary Scott Bessent said the U.S. extended a sanctions waiver allowing sales of Russian oil after requests from more than ten vulnerable countries. (orissapost.com) - NPR reported some oil‑related payments are increasingly being made in Chinese yuan rather than US dollars. (npr.org) - Together, those developments point to sanctions policy flexibility and added strain on the petrodollar, nudging parts of trade toward parallel payment arrangements. ( )
The Trump administration renewed a waiver on Russian seaborne oil, keeping some sanctioned shipments legal through May 16 as officials tried to contain an energy shock. (cnbc.com) CNBC reported on April 18 that the Treasury Department’s waiver covers Russian oil and petroleum products loaded on vessels as of that Friday, replacing a 30-day waiver that expired on April 11. Treasury Secretary Scott Bessent later said the extension followed requests from representatives of more than 10 vulnerable countries. (cnbc.com; firstpost.com) The waiver came after Bessent had said two days earlier that Washington would not renew it, according to CNBC. The same report said partner countries raised the issue on the sidelines of Group of 20, World Bank, and International Monetary Fund meetings in Washington, and that President Donald Trump discussed oil with Indian Prime Minister Narendra Modi. (cnbc.com) The petrodollar is the habit of pricing and settling much of the oil trade in U.S. dollars, a system that has supported dollar demand for decades. NPR said on April 22 that the Iran war has put that system under pressure and that some tolls tied to oil flows were reportedly being collected in Chinese yuan. (northcountrypublicradio.org) That does not mean the dollar is suddenly losing its central role. A 2026 Council on Foreign Relations analysis said the “glory days” of petrodollar recycling are over, but argued dollar liquidity now depends more on broader global finance and trade than on Gulf oil exporters alone. (cfr.org) The underlying currency data still show a large U.S. lead. The International Monetary Fund’s COFER database continues to track the dollar as the biggest reserve currency, while SWIFT’s January 2026 tracker put the renminbi at 3.13% of global payments by value, ranking fifth. (imf.org; swift.com) Federal Reserve research published in 2024 reached a similar conclusion: renminbi use had grown in trade invoicing and payments, but the currency was “nowhere close” to rivaling the dollar’s overall international role. The Bank for International Settlements’ 2022 triennial survey also showed the dollar on one side of 88% of foreign-exchange trades, underscoring how deeply it remains embedded in global markets. (federalreserve.gov; bis.org) What changed this month is narrower and more immediate: Washington showed it will bend sanctions when oil shortages threaten poorer importers, while some trade linked to the Middle East conflict is being routed through non-dollar channels. Those two moves do not replace the dollar, but they do show how energy stress can push governments and traders toward parallel payment arrangements. (cnbc.com; northcountrypublicradio.org; cfr.org)
