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U.S.’s moves on oil reflect its uneasiness over global trade and financePresident Donald Trump’s urgency to push the Russia Sanctions Bill through Congress, granting him the power to impose tariffs of up to 500% on nations buying oil from Moscow, is officially framed as a punitive measure to weaken Russia’s war economy. Yet, this legislative push comes just after the capture of Venezuelan President Nicolás Maduro on January 3. Throughout his press briefings thereafter, Mr. Trump emphasised Venezuela’s vast oil reserves as America’s underlying strategic interest. This twin focus on Russian sanctions and Venezuelan oil assets suggests that both measures are less about geopolitical ‘penalisation’ and more about protecting the petrodollar’s dominance at a time when its hegemony is eroding. For decades, oil has been priced and largely settled in U.S. dollars. That system underpinned the dollar’s centrality in global finance for much of the late 20th century. But since the sanctions on Russia following its 2014 annexation of Crimea, and, more vigorously, after the Ukraine invasion in 2022, major consumers such as China and India have deepened trading arrangements that circumvent the dollar. India, for instance, imported substantial volumes of Russian crude since 2022, accounting for more than 20% of Russia’s war-period crude exports. China’s purchases were even larger, reflecting its strategy to secure energy at a discount and experiment with non-dollar settlement mechanisms.China’s use of the yuan in energy trade has significantly enhanced the internationalisation of the renminbi. India has also reportedly begun paying for some Russian crude in yuan, signalling small but telling shifts in how global energy commerce is conducted. Meanwhile, the oil market is evolving with the global energy transition — electric vehicles sales, led by China, are reshaping demand patterns. Mr. Trump’s “return to oil” rhetoric and policy thrust must thus be read in the context of this transition. China’s dominance in the EV ecosystem represents a structural challenge not just to oil firms but also to the broader economic and financial architectures that supported U.S. dominance for decades. In this light, it is not far-fetched to argue that America’s aggressive moves in Venezuela and its hardline strategy against Moscow on oil (and not much else) are aimed more at curtailing China’s expanding influence — both in energy markets and in pushing alternatives to the petrodollar — than at addressing geopolitical grievances. Moreover, the spectre of a parallel currency arrangement contemplated by BRICS as a challenge to the ‘mighty dollar’ further unsettles traditional dollar-centric financial orders. What is at stake is not merely oil or geopolitics, but the architecture of global trade and finance at a moment of historic transition.
1️⃣ Top 10 Vocabulary(with meaning + usage)
1. De-dollarisation
Meaning: Reduction in reliance on the US dollar in global trade/finance.
Example: De-dollarisation gained momentum after sanctions on Russia disrupted dollar-based payments.
2. Petrodollar
Meaning: System where oil is priced and traded in US dollars.
Example: The petrodollar system strengthened America’s global financial influence.
3. Hegemony
Meaning: Dominant leadership or control by one state.
Example: Dollar hegemony has shaped the post-war global financial order.
4. Circumvent
Meaning: To avoid or bypass rules or restrictions.
Example: Countries created alternative mechanisms to circumvent dollar-based sanctions.
5. Internationalisation (of currency)
Meaning: Use of a currency beyond national borders.
Example: China is pushing the internationalisation of the yuan through energy trade.
6. Coercive diplomacy
Meaning: Use of economic or military pressure to influence state behaviour.
Example: Sanctions represent a form of coercive diplomacy.
7. Settlement mechanism
Meaning: System through which payments in trade are completed.
Example: Non-dollar settlement mechanisms are gaining prominence.
8. Structural challenge
Meaning: A deep, systemic threat rather than a temporary one.
Example: China’s EV dominance poses a structural challenge to oil demand.
9. Multipolar order
Meaning: Global system with multiple centres of power.
Example: A multipolar order may also lead to a multipolar currency system.
10.Spectre
Meaning: A looming fear or threat.
Example: The spectre of a parallel currency system unsettles the US.
📘 HIGH-LEVEL RC MCQs
(Based on the Editorial: “De-dollarisation fear”)
RC Q1. (Central Thesis)The author’s primary argument is that recent U.S. actions on Russian sanctions and Venezuelan oil are driven mainly by:
A. The need to weaken Russia’s war economy
B. Concerns over human rights and democracy
C. Anxiety over erosion of dollar dominance in global finance
D. The necessity to stabilise global oil prices
RC Q2. (Inference)The author implies that excessive reliance on sanctions by the U.S.:
A. Strengthens compliance with international law
B. Discourages oil trade altogether
C. Accelerates experimentation with non-dollar trade mechanisms
D. Leads to higher oil prices for importing nations
RC Q3. (Critical Reasoning)Which of the following, if true, would MOST weaken the author’s argument?
A. Oil continues to be predominantly priced in U.S. dollars
B. Countries revert to dollar payments once sanctions ease
C. China abandons yuan-based settlement in energy trade
D. BRICS members increase bilateral trade among themselves
RC Q4. (Cause–Effect)According to the editorial, China’s dominance in electric vehicle (EV) ecosystems is significant because it:
A. Reduces China’s dependence on Middle Eastern oil
B. Undermines the long-term centrality of oil in global finance
C. Forces the U.S. to increase oil production
D. Increases global demand for fossil fuels
Q1. Answer: C
Explanation: The editorial explicitly argues that U.S. actions are less about punishment and more about protecting the petrodollar system and dollar dominance.
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