This is a commentary and not an analysis :

GEOPOLITICUS | Anjan Sengupta

United States military strikes against Islamic Revolutionary Guard Corps (IRGC) targets in the Middle East have conspicuously avoided oil infrastructure, reflecting a complex geopolitical energy strategy. Meanwhile, Ukraine continues targeting Russian refineries, and Houthi forces selectively strike Saudi Arabian energy facilities while the United Arab Emirates has suspended oil sales.

This selective disruption of global energy corridors, including potential closures of the Strait of Hormuz and the Bab-el-Mandeb, serves to inflate energy prices. The United States leverages this volatility to sustain the petrodollar. It does this by restricting Russian and Middle Eastern crude while releasing its own reserves alongside Norwegian and US-controlled Venezuelan supplies. Consequently, alternative producers like Guyana, Brazil, and Kazakhstan are becoming focal points for long-term energy investments by China and India. This shifts the global balance. Meanwhile, the Houthis retain the geographical capability to target Mecca, introducing a highly volatile religious and regional escalation risk.

Comment

The deliberate omission of Iranian energy infrastructure from recent American retaliatory strikes reveals a calculated effort to preserve the structural integrity of the global petrodollar system. This monetary framework, anchored by the 1974 US-Saudi agreement, relies on the uninterrupted flow of dollar-denominated crude through the Strait of Hormuz. By targeting only Islamic Revolutionary Guard Corps command nodes rather than refineries, Washington avoids triggering an uncontrollable price spike that would accelerate global de-dollarisation. Preserving this dollar-centric architecture remains a core priority for Washington.

Consequently, energy corridor weaponisation forces Asian importers to bypass Western clearing houses. The expansion of bilateral local-currency trade agreements, such as India's rupee-dirham settlement system with the United Arab Emirates, directly erodes the long-term hegemony of the greenback. This shift ultimately reduces the efficacy of unilateral US Treasury sanctions against targets in the Persian Gulf.

Strategic Question for Discussion

If the expansion of bilateral mechanisms like the India-UAE rupee-dirham settlement system continues to accelerate, does the geopolitical utility of the 1974 US-Saudi agreement break down, or does it simply shift the burden of petrodollar defence to alternative maritime chokepoints?

The proliferation of non-dollar clearing mechanisms suggests that the foundational 1974 US-Saudi agreement is transitioning from a global default to a contested regional framework. My assessment is that while bilateral arrangements like the rupee-dirham system erode marginal dollar dominance, the greenback's ultimate defence will rely on the US Navy's ability to guarantee physical security across critical chokepoints like the Strait of Hormuz. Consequently, financial hegemony will increasingly depend on direct maritime enforcement rather than legacy diplomatic accords.

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