Position Paper

Committee: The Economic and Social Council

Topic: The Fall of the Petrodollar in the Aftermath of the Russian-Ukraine War
Country: The United Kingdom
Name: Mustafa Mohammed Mustafa Shammout

The UK is a constitutional monarchy in northwestern Europe. Since the 1970s, one of the UK’s
largest imports has been petrol/oil. In fact, the UK imports approximately 797,631 crude oil
barrels per day. As a result, the UK has established full diplomatic relations with multiple oil-
producing countries. Due to the 1945 US-Saudi agreement, most oil-exporting countries only
accept the petrodollar as payment for oil. This is what kept the US currency and other pegged
currencies, including the UK pound, valuable. However, the Russian-Ukraine conflict has
caused Russia to stop buying oil with the petrodollar. This afflicted the policies of many
importers and exporters and caused global economy to take a huge turn.
Recently, Saudi talks with China and India have been made to stop using the petrodollar.
Moreover, Russia has established relations and decided along with other oil-exporting
countries, OPEC+, to cut oil exports by 2M barrels a day. The fall of the petrodollar is affecting
the US economy remarkably. All countries with dollar-pegged currencies are being affected
negatively with inflation rates becoming exceedingly high.
The UK is one of the most affected countries due to this conflict, but why? As a result of
Russia’s illegal invasion of Ukraine, the UK blocked oil imports from Russia. Furthermore, Gulf
oil prices have increased by more than 2%, and the OPEC+ oil cut caused oil prices to increase
further. In addition, the UK is experiencing great inflation rates of 11.1% due to the fall of the
petrodollar. This is because the pound is pegged to the dollar.
The fall of the petrodollar is very recent. However, there is great concern. As a British prime
minister said: “One volatile commodity that can disrupt businesses, people’s lives, by a
trebling of prices over a short period of time.” The UK believes that with careful processing, a
solution to the fall of the petrodollar can be reached. The delegation of the UK proposes that
all countries make a commitment to end this conflict. To make this commitment successful,
the following actions must be taken:

• The OPEC+ removes the oil cut to importing countries

• The US-Saudi agreement must be ceased
• The creation of ‘The UN Oil Organization’ to make sure all members exchange oil while
maintaining their country's economy
• The construction of the ‘Petro-Currency’ and pegging the dollar to it
 • The organization will consist of three main branches:
1. Inspection/Security Branch: Ensures all imported and exported oil of the
members is through the organization.
2. Statistical/Analysis Branch: Analyzes and monitors Petro-Currency value and
data.
3. Decision-Making Branch: Monthly conventions to maintain stability and
relations.
• An agreement between all UN members to enter this organization
• A pledge to hold the value of the currency regardless of external conflicts

All in all, the UK stresses the need for Member States to coordinate efforts to help resolve the
fall of the petrodollar. The UK believes all members must act to find a solution and bring the
success of their economy back again.

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- King, Andy. “Consumer Price Inflation, UK: October 2022.” Consumer Price Inflation, UK -
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