Petrodollar system is the worldwide practice of trading and pricing crude oil in United States of America (USA), which may started in the year 1974 after a deal between United States of America and Saudi Arabia. In thus deal or agreement, the United States of America give military protection and Saudi Arabia sell its oil only in U.S. dollars and later OPEC (Organization of the Petroleum Exporting Countries) joined this agreement or arrangement.

As, it is most used in international transactions., petrodollars is the main or primary reserve currency of the world. Many countries use it as their official currency. However, the word petrodollar refers to the money received from the sale of petroleum or oil revenues denominated in U.S. dollar. Although, petrodollars initially referred to money that Middle Eastern countries and members of OPEC (Organizations of the Petroleum Exporting Countries) received, now the definition had broadened. Petrodollars accumulate to oil-exportimg countries, which depends on the sale price of oil as well as the volume being sold abroad, which in turn dependent on the production of oil.

OPEC is the organization of Petroleum exporting countries. There are several countries in the OPEC organization such as Kuwait, Indonesia, Iraq, Iran, Nigeria, Libya, Saudi Arabia, Algeria, and many more. OPEC members countries hold 80 percent of crude oil reserves and 50 percent of nature gas reserves of the world. These members always try to keep or maintain oil prices as high as possible. However, the benefit of new technology had major effects on oil prices globally. In other words, petrodollars are revenue of exporting oil countries. The oil exporting countries earn more money from exporting of crude oil than the requirement in their own countries. So, they invest surplus money in other countries, which affects world economy. If they do not invest in other countries, global economy would have suffered. Large volumes of Arab petrodollars in the United States Treasury Securities that is Government debit issued by United States of America and in other financial markets of major industrial economies. The up and down of market prices of petrol may affects whole world economy. In this way, the petrodollars influence the world economy.