The petrodollar system came into effect in June 1974. It followed an oil crisis which arose in the Middle East following the Yom Kippur war (1973) which created global oil shortages and oil price spikes.
An arrangement between the USA and Arab oil states (which was soon followed by the rest of the OPEC countries) meant that oil would be traded in Dollars, and in return the USA would provide security and access to financial markets in the US.
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