Venezuela Abandons the Petrodollar

The Economic Collapse Blog is reporting that Venezuela is abandoning the petrodollar.

The government of this oil-rich but struggling country, looking for ways to circumvent U.S. sanctions, is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy have told The Wall Street Journal.

The article also quotes Christopher Doran:

In a nutshell, any country that wants to purchase oil from an oil producing country has to do so in U.S. dollars. This is a long standing agreement within all oil exporting nations, aka OPEC, the Organization of Petroleum Exporting Countries. The UK for example, cannot simply buy oil from Saudi Arabia by exchanging British pounds. Instead, the UK must exchange its pounds for U.S. dollars. The major exception at present is, of course, Iran.
This means that every country in the world that imports oil—which is the vast majority of the world’s nations—has to have immense quantities of dollars in reserve.

As described on this blog in Global Reserve Currency: Army of the Modern Empire, the US benefits from maintaining global reserve currency status because financial punishments can be unilaterally levied on other countries. This allows the US to maintain a global empire with a fairly small military, but it requires her to use the military against threats to global reserve currency status.

The American path to war almost always begins with a threat to the dollar's monopoly on the trade of energy commodities. 

 American foreign policy actions become highly predictable when viewed as through the lens of maintaining hegemony over the trade of energy resources. Unless something has changed, we should expect a strong reaction from the US regarding Venezuela. Direct military intervention has not been the normal way for Americans to influence Latin American countries, although it has happened. The common route is clandestine support for whichever faction, no matter how brutal or undemocratic, best serves American interests. We have to assume that the American deep state has tried very hard in Venezuela, but failed. The primary goal with Latin America has been to prevent the rise of anti-American socialist states. Rebuking the petrodollar is tantamount to declaring war against the American empire. The US options amount to redoubling her clandestine efforts, organizing an international reaction, intervening with direct military force, or giving up on the global empire project, which they will attempt more or less in that order. The last one might seem laughable, but Trump is a wild card here. It seems that his administration has been co-opted by neocons, but at the same time Trump is not personally a neocon, and he likes to be the one calling the shots.