Degree Name

Doctor of Philosophy


School of Humanities and Social Inquiry


This thesis makes two unique contributions to the International Political Economy literature. It presents the first comprehensive, empirical investigation of petrodollar accumulation and recycling spanning the period 1980-2021. It also corrects the misconception that petrodollar recycling in the 1970s and 1980s involved the extension of loans to developing countries using fractional reserve banking and argues that these loans were the extension of created credit. Petrodollars garnered significant academic attention in the 1970s and 1980s when increased oil prices led to large influxes of petrodollars to oil-exporting states and widespread deficits and stagflation in oil-importing states. The recycling of these petrodollars led to increased militarisation in oil-exporting states, as well as increased national debts in oil-importing states which precipitated the developing world’s debt crisis. Between 1999 and 2021, oil prices have hit peaks higher than those reached in the 1970s and this has resulted in a similar transfer of petrodollars. This thesis uses a quantitative and qualitative methodology to explore the key role of petrodollars in the current global political economy, and to illustrate the impact they are likely to have in the future as resources deplete. Over the period 2004-2021, petrodollar accumulation averaged $1.27 trillion annually, with approximately 54.6 percent of this accumulated by the Organisation of Petroleum Exporting Countries. These petrodollars predominantly flow back into the global economy through one of two channels: economic, through increased imports and domestic expenditure; or financial, through foreign investments and the purchase of foreign exchange reserves. These recycling methods will have lasting implications as they impact on which oil-importers’ deficits are financed and which are not, and which businesses/industries are funded and which are not. The significance of petrodollar accumulation and recycling is likely to further increase in the future. While advances are being made in alternative energy, oil’s unique characteristics and its embeddedness in the petrochemical, agriculture, and transportation sectors make it invaluable in a petro-market civilisation which is dependent upon transnational supply chains and large-scale agriculture. This makes it likely that high oil-consumption rates will continue, as will petrodollar accumulation, until we reach depletion.

FoR codes (2008)

1606 POLITICAL SCIENCE, 160604 Defence Studies, 160607 International Relations, 160699 Political Science not elsewhere classified



Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.