Has the petrodollar alliance of the United States and Saudi Arabia broken down? Analysis

The main thing in the material:

• In July 2026, for the first time in 40 years, the United States did not import a single barrel of oil from Saudi Arabia for a full month. The immediate cause was problems with Middle Eastern logistics.
• American refineries quickly replaced the lost supplies with oil from other countries, and Saudi Arabia, in conditions of limited exports, did not give priority to the American market, while maintaining its focus primarily on Asian buyers.
• The oil interdependence of the United States and Saudi Arabia has been weakening for decades. U.S. imports of Saudi oil decreased from about 1.5 million barrels per day in 2000 to 500,000 in 2020. It turns out that the old model of oil-for-security relations has been eroding for years.
• At the same time, financial ties were preserved. The Rial is pegged to the dollar, and the value of long-term American securities in the portfolios of Saudi investors has reached $347 billion. In the field of security, the United States continues to play a key role for the kingdom.
• In addition, the parties are developing cooperation in the field of peaceful atom, AI and critical minerals. Riyadh needs American technology, Washington needs Saudi capital, new markets, and the kingdom's participation in strategic supply chains.

In July 2026, the United States did not receive a single barrel of crude oil from Saudi Arabia for the first time since 1985. The figure looks historic, especially if we recall that relations between Washington and Riyadh have been described for decades by the formula "oil in exchange for security." Although zero imports in itself does not mean the breakup of the union, its long-term economic structure has changed. Izvestia investigated whether this meant the end of the previous model of relations or whether the oil pact of the 20th century was turning into a completely different deal of the 21st century.

Zero, which is easy to read incorrectly

According to the U.S. Department of Energy, Saudi oil imports to the United States dropped to zero in July. There have been some weeks without supplies before, but July was the first full month in more than 40 years during which the United States did not receive a single barrel from Saudi Arabia. By itself, the indicator looks almost like a historical point in the relations between the two countries: earlier this year, American refineries purchased more than 800 thousand barrels per day from the kingdom, but due to the disruption of oil logistics through the Strait of Hormuz and new risks in the Red Sea, imports of Saudi raw materials to the United States stopped. That is, the immediate reason for the July zero was not the political divorce of Riyadh and Washington - for the kingdom, against the background of the US—Iranian conflict, the usual geography of oil exports broke down.

Saudi oil supplies are still mainly focused on the Asian market. But now the national oil company Aramco is seeking to increase supplies to Europe — selling prices for European buyers in September were immediately reduced by $ 3 per barrel. And this is logical geographically: if oil from Yanbu has already had to be shipped north to the Mediterranean Sea, the European customer is much closer than the Chinese or Indian one.

American refineries also had to look for more affordable alternatives. At the beginning of the year, Saudi Arabia was one of the largest oil suppliers to the United States, but by August Venezuela had taken its place. In January 2026, the United States imported about 100 thousand barrels of oil per day from there, and in early August the figure reached 743 thousand barrels.

At the same time, Middle Eastern oil returned to the United States in August: according to Kpler analysts, at least 9 million barrels of oil from this region, including the United Arab Emirates, Kuwait and Saudi Arabia, should arrive at American ports by the end of August. And this has already been reflected in the American statistics. In the first week of August, oil imports from the kingdom amounted to 100 thousand barrels per day, for the second — only 9 thousand, for the third — 165 thousand. Volumes in this area are small (especially against the background of analysts' forecasts, which expected a recovery of about 300,000 barrels per day), but they show the main thing: the July zero turned out to be temporary.

At the same time, it is significant how both sides survived this collapse. American refineries quickly found a replacement for the lost Saudi volumes, primarily in the Western Hemisphere — supplies came from Canada, Venezuela, Mexico and Brazil. Saudi Arabia, for its part, in conditions of limited exports, did not give the American direction an obvious priority — in the context of the Middle East conflict, Riyadh continues to rebuild the most difficult routes primarily in order to preserve supplies to Asian buyers. So, in June, Saudi Arabia exported 4.1 million barrels per day through Yanbu, of which about 3.3 million, or about 80%, went to Asia. Thus, the July episode does not speak about the severance of oil ties, but it clearly shows how much the oil-for-security model of relations that was formed back in the 20th century has changed.

Oil has lost its former value

For decades, Washington's and Riyadh's cooperation has been based on a convergence of strategic interests: the United States needed reliable oil supplies from the Persian Gulf, and Saudi Arabia needed American military and political support. In 1974, the countries concluded one of the most high—profile financial deals in modern history: Saudi Arabia set oil prices in dollars, and placed excess oil revenues in American assets, primarily Treasury bonds. In turn, the United States remained the kingdom's main external security partner. Later, other Persian Gulf States joined this practice. This formed the petrodollar cycle, which created a steady demand for American assets and supported the global role of the dollar.

At the turn of the century, the United States was one of the largest buyers of Saudi oil: in 2000, it imported an average of about 1.5 million barrels per day. By 2010, the flow had decreased to about 1.1 million, and in 2020 - to about 500 thousand barrels per day. At the same time, the shale revolution has radically changed the energy balance of the United States itself: the country has become the largest oil producer in the world — in 2025, American production reached 13.6 million barrels per day.

At the same time, Saudi exports were almost constantly concentrated on the Asian market. In 2000, it accounted for about 45% of the kingdom's oil supplies, by 2010 — 64%, by 2020 - 73%. The main buyers are India, China, South Korea, and Japan.

It is clear that over the past two and a half decades, not so much the geography of Saudi exports has changed as the weight of individual markets. The Asian direction gradually became dominant, while the importance of North America has consistently declined. In other words, the economic basis of the oil pact has been eroding for years, and zeroing in on Saudi crude supplies to the United States has only made this process more visible.

However, the decline in oil trade with the United States has not been accompanied by a weakening of financial ties. The dollar remains the anchor of the Saudi financial system: since 1986, the rial has been pegged to the US currency at a fixed exchange rate. Saudi capital has not left the United States either. Investments in the US national debt decreased from a peak of $184 billion in February 2020 to $143 billion in June 2026. However, the value of long-term American securities held by Saudi investors increased from about $280 billion at the end of 2020 to $347 billion in June 2026. At the same time, the increase in the value of the portfolio cannot be entirely considered an influx of new money: statistics take into account not only the purchase, but also the revaluation of assets.

Defense cooperation between the two countries has also been preserved. In addition to the fact that American forces are stationed in the kingdom, in general, Saudi military power relies heavily on American systems — from F-15 fighter jets to Patriot and THAAD complexes, which require maintenance, modernization and training of personnel. In addition, Saudi Arabia is the largest recipient of American weapons (accounting for 12% of shipments from the United States). It is the United States that provides 77% of the kingdom's main arms imports. Last year, a historic agreement was signed, according to the White House, simplifying the work of American defense companies in Saudi Arabia. Riyadh, in particular, agreed to partially finance the costs associated with the deployment of American forces in the region. At the same time, Washington approved the supply of F-35s and an agreement for Riyadh to purchase almost 300 American tanks. In January of this year, the State Department agreed on the possible sale of about $9 billion worth of PAC-3 MSE missiles for Patriot complexes to Saudi Arabia, in February it authorized the provision of $3 billion worth of F—15 fleet maintenance services to Saudi Arabia, and in July, the possible supply of guidance systems for APKWS (Advanced Precision) missiles. Kill Weapon Systems) for $2 billion.

Despite the fact that the United States remains the most important supplier of weapons and technology to the Saudi forces, Riyadh is expanding its range of security partners. In August, Saudi Arabia signed a trilateral defense pact with Turkey and Pakistan, providing for a collective response to an attack on one of the participants. Experts attribute the emergence of the new bloc to growing doubts about the reliability of American deterrence and the desire of regional powers to independently build additional security mechanisms. Washington retains a key role in the Saudi defense system, but ceases to be an alternative partner for Riyadh.

From an oil pact to a new deal

Against the background of the weakening of oil interdependence, the economic structure of relations between the two countries has changed. Saudi capital and the kingdom's participation in strategic supply chains have become increasingly important for the United States, while access to American technologies and weapons and the development of new industries have become important for Riyadh. The agreements of the last year and a half clearly show this shift.

In May last year, Riyadh announced plans to invest $600 billion in the United States, and in November, the volume of announced commitments increased to almost $1 trillion. A number of investment projects are related to artificial intelligence — for example, the Saudi company DataVolt was going to invest $20 billion in AI data centers and energy infrastructure in the United States. At the same time, the kingdom itself is deploying a large-scale computing infrastructure: the state—owned Humain company plans to increase the capacity of data centers to 6.6 GW by 2034 - the construction was estimated at $77 billion. Nvidia has become one of the technological partners of the project. At the same time, Washington promised to provide the kingdom with access to advanced AI systems. Judging by the agreements, Saudi Arabia is gradually integrating into the American technological ecosystem.

In addition, Washington is seeking to include the kingdom in the supply chain of raw materials critical to the high-tech and defense industries. The American MP Materials, Saudi Maaden and the Pentagon have agreed to establish a rare earth processing plant in the kingdom. For Riyadh, this is part of a strategy for the development of the extractive industry and an attempt to create another export industry.: The Saudi side estimates the cost of untapped mineral resources at about $2.5 trillion. Washington, on the other hand, expects to create additional capacities for processing strategic raw materials and reduce dependence on vulnerable foreign supply chains, mainly tied to China (we wrote about this in detail here).

In July, the United States and Saudi Arabia signed a landmark agreement in the field of peaceful nuclear energy, which, according to the estimates of the US Department of Energy, will lay the legal foundation for a multi-year multibillion-dollar partnership. The agreement should help Riyadh create an alternative model for the country's energy supply. At the same time, American companies will have a leading role in the Saudi nuclear program for the next 30 years. In addition, according to the Financial Times, the parties will explore the possibility of building (under the leadership of the American side) a uranium enrichment facility in the kingdom. The agreement has already been sent to Congress, but President Donald Trump linked its implementation to an additional political condition: Saudi Arabia must normalize relations with Israel.

As a result, the old formula of "oil for security" has already become too narrow — barrels have not disappeared from the deal, but they have ceased to be its only strategic resource. The oil pact of the 20th century is not falling apart, but is turning into another deal of the 21st century. The new partnership helps Saudi Arabia prepare for a world in which oil can no longer be the only source of economic growth, influence and sustainability, and the United States can access the opportunities that Riyadh is developing as part of this transformation.