Diana Choyleva wrote an excellent editorial for the Wall Street Journal entitled “The Iran War Is A Boon For The Petrodollar.”

She pushes back against claims that the Iran conflict is accelerating the death of the petrodollar.

Instead, RealInvestmentAdvice.com points out that she argues the opposite: between Iran and Venezuela, the U.S. is defending and bolstering dollar dominance in the oil trade.

The 75-year-old petrodollar system rests on oil being priced and traded in dollars, which keeps the dollar prominent in all global trade.

China has been undermining the petrodollar through yuan settlement systems and by deepening its ties with some Arab nations.

Rather than Iran being a “perfect storm” weakening the petrodollar, as some argue, Choyleva sees American military engagement in Iran as supportive of the dollar. 

Simply, control the flow of oil, and you control the currency it’s traded in.

Most Arab nations back the US campaign against Iran. Importantly, “the security commitment was tested; it held.”

This reinforced the security-for-oil-pricing bargain that underpins the petrodollar system.

The removal of Venezuelan President Maduro and influence over Venezuelan oil accomplishes similar goals.

If the US controls Western Hemisphere oil reserves, it would command more oil than OPEC combined, thus providing enormous leverage for keeping oil priced in dollars.

The author sees two scenarios for how the war ends.

First, an agreement that gives the U.S. influence over Iranian oil flows.

Second, US forces seize Kharg Island and police the Strait of Hormuz.

In her words, controlling “the choke point through which a fifth of the world’s oil flows.”

Either way, both events lead to more dollar-based oil trades, not less.

She concludes that "those who conclude that the petrodollar is already in its death throes are reading the map upside down. The storm is real. The dollar is fighting back."