Petrodollar recycling is the international spending or investment of a country's revenues from petroleum exports ("petrodollars").[3] It generally refers to the phenomenon of major petroleum-exporting states, mainly the OPEC members plus Russia and Norway, earning more money from the export of crude oil than they could efficiently invest in their own economies.[4] The resulting global interdependencies and financial flows, from oil producers back to oil consumers, can reach a scale of hundreds of billions of U.S. dollars per year – including a wide range of transactions in a variety of currencies, some pegged to the U.S. dollar and some not. These flows are heavily influenced by government-level decisions regarding international investment and aid, with important consequences for both global finance and petroleum politics.[5] The phenomenon is most pronounced during periods when the price of oil is historically high.[6]
The term petrodollar was coined in the early 1970s during the oil crisis, and the first major petrodollar surge (1974–1981) resulted in more financial complications than the second (2005–2014).[7]
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