'A sign of desperation'—Venezuela and the petrodollar endgame
U.S. forces carried out a dramatic military operation in Venezuela last week, abducting President Nicolás Maduro and flying him to the United States in a mission that stunned governments around the world.
Economist Richard Werner argues that the regime change operation should be viewed not only through a geopolitical lens, but also as part of a broader effort to defend the U.S.-led petrodollar system.
The petrodollar has been a pillar of American financial power since the 1970s, following an agreement negotiated under then–Secretary of State Henry Kissinger, in which Saudi Arabia agreed to price oil exports exclusively in U.S. dollars. In return, the United States provided security guarantees and access to its financial markets.
That arrangement effectively forced global energy buyers to hold dollars, creating sustained international demand for the currency and enabling the U.S. to finance deficits at low cost while exerting outsized influence over the global financial system.
Werner contends that this system is now under structural threat, placing Venezuela, home to massive oil reserves, at the center of the dispute.
“Venezuela, with the world’s largest oil reserves, challenged the dollar by selling oil in yuan, euros, rubles, bypassing the dollar, and building alternative payment channels with China,” Werner wrote.
He argues that such moves intersect with accelerating global de-dollarization efforts led by Russia, China, Iran, and the BRICS nations, which are increasingly seeking to settle trade outside the U.S. dollar system.
A sign of “desperation”
Werner described the abduction of Maduro as a sign of “desperation,” arguing it comes at a moment when the U.S. dollar’s dominance in the global financial system is visibly eroding.
Data cited by economists and market analysts point in that direction.
Citing data compiled by Bloomberg, market analytics firm Barchart recently reported that the dollar’s share of global foreign-exchange reserves has fallen from nearly 65% at the start of the century to around 40% in 2025.
U.S. Dollar share of global foreign currency reserves have fallen to its lowest level this century :exploding_head::chart_with_downwards_trend::eyes::money_with_wings: pic.twitter.com/ORhBLdtdZJ
undefined Barchart (@Barchart) January 3, 2026
Separate data from Bloomberg and analysis by Otavio Costa show that, for the first time since the mid-1990s, gold holdings as a percentage of central-bank foreign reserves have surpassed holdings of U.S. Treasurys.
Foreign Central Banks now own more Gold than U.S. Treasuries for the first time in almost 30 years :rotating_light::rotating_light::rotating_light: pic.twitter.com/iJxdTDpbxO
undefined Barchart (@Barchart) January 3, 2026
The shift is widely seen as significant, reflecting growing concern among monetary authorities about U.S. fiscal sustainability, sanctions exposure, and the long-term reliability of dollar-denominated assets.
The trend has also been reflected in currency markets. The U.S. dollar fell roughly 9% against a basket of major currencies in 2025, its second-weakest annual performance since 2003, according to The Kobeissi Letter. It was only the fifth time since 2010 that the dollar experienced an annual decline.
The US Dollar experienced a historic decline in 2025:
undefined The Kobeissi Letter (@KobeissiLetter) January 1, 2026
The US Dollar Index fell -9% in 2025, marking its worst performance since 2017.
This represents a sharp reversal from the +8% gain recorded in 2024.
Excluding 2017, this was the weakest year for the currency since 2003.… pic.twitter.com/c2P8pYcBl8