Oil, the US dollar and the war on Gaza
The speed with which US President Donald Trump’s Board of Peace (BoP) developed from a committee to deal with Gaza to a club for the countries of the world with a billion-dollar membership fee offers a key to why Palestine is not only a regional issue, but central to world politics.
Trump has already kidnapped Nicolas Maduro, the president of Venezuela – a country that holds one-fifth of the world’s known oil reserves – and last year carried out airstrikes against Iran, another major oil producer.
Before the US invaded Iraq in 2003, Iraq sold its oil in Euros. Now it’s in dollars.
Running through the violence in the Middle East and Venezuela is a sticky stream of oil. The largely US-based oil sector has made profits of $3 billion a day for the past 50 years. Oil is central to the US because most world oil is bought and sold using the dollar. So countries buying oil have to buy dollars.
This creates a big demand for dollars, which keeps the value of the currency high. Companies selling oil accumulate gigantic piles of dollars. They spend these on US government bonds (interest-bearing loans to the government), property, and shares in major companies.
This flow of wealth into the US means its government can spend more than it gets from taxes. This keeps US taxes low, especially for the wealthy. The dollar also finances US government spending on the military, creating the biggest armed forces in the world, And it finances its billion-dollar supply of weapons to Israel – its agent and base in the Middle East, securing its watchdog role in the region. The Palestinian resistance threatens Israeli power, and its importance for the US.
Venezuela and Iran do not sell oil in dollars – a threat to the US. Hence Trump’s attack on Venezuela, his stronghold sanctions on Iran, and his total support for Israel’s war on Gaza, not to mention his backing for sanctions on Russian oil and enthusiasm for seizing on the high seas vessels trying to evade them, all to protect the dollar.
