The idea of the petrodollar as a geopolitical pact is a misconception. The dollar’s global role stems from the eurodollar system, a network of offshore dollar deposits far predating the 1973 oil embargo. This decentralized system, built by global banks, allowed oil revenues to flow into U.S. Treasuries without requiring direct U.S. control. Today, the petrodollar narrative overlooks how dollar dominance persists through $14tn in offshore eurosdollars — liabilities created by non-U.S. banks — and merchants’ preference for dollar-denominated trade invoices. The myth collapses under scrutiny: Iran’s pivot to yuan, China’s growing influence, and Bitcoin tolls in the Strait of Hormuz underscore dollar fragility, yet its power remains rooted in market-driven flexibility, not naval fleets or oil pricing.