[JumpCrisscross]

> forcing oil to be bought with dollars, the USD was pegged to oil demand, especially from developing nations whose consumption was growing

If you give me one source, I'll break down why this is wrong.

(In case there isn't one, the U.S. dollar was never pegged to oil demand [whatever that means]. And nothing about petrodollar recycling thought about developing nations for one second.)

[detourdog]

Hasn’t all recent oil purchases been settled using USD. My understanding is that most countries buy US treasuries to maintain US credit ratings and to settle global trade debts.

[JumpCrisscross]

> Hasn’t all recent oil purchases been settled using USD

No. I’ve traded and settled oil in British pounds from a desk at a bank in New York.

> most countries buy US treasuries to maintain US credit ratings and to settle global trade debts

No to the first, partly to the second. Holding Treasuries doesn’t affect creditworthiness. That said, Treasuries are a universal collateral, so some lenders may require Treasuries be held in reserve for their safety (usually in a third-country bank).

The main reason countries buy Treasuries is for reserves. These are maintained so they can defend their currency. They need dollars to do this if their country trades in and/or finances with dollars. (If they trade in or finance with yuan, they should hold yuan bonds, which they can quickly turn into yuan to sell into the market to buy back their currency, thereby stabilizing it.)