The Milestone June 8, 1974 agreement between the USA and Saudi Arabia was not about exclusively pricing oil in US dollars. It was about enabling Saudi Arabia to use its windfall of oil money into the US economy. The petrodollar system does and did become dominant but it was for mutual economic benefit. The non-renewal of the economic cooperation agreement is an issue but it is not the immediate collapse of the petrodollar system. Here is more of the details about it.

n a blog post published Friday, Paul Donovan, chief economist at UBS Global Wealth Management, remarked that the fake story had become surprisingly widespread, providing another lesson about the pitfalls of "confirmation bias."

"Clearly, the story that is going around today is fake news. There was an agreement signed in June of 1974, but it had nothing to do with currencies because the Saudis carried on selling in sterling after that," Donovan noted.

The surge in oil prices following the OPEC embargo was leaving Saudi Arabia with a surplus of dollars, and the Kingdom's leadership was eager to harness this wealth to further industrialize its economy beyond the oil sector. At the same time, the U.S. wanted to strengthen its then-nascent diplomatic relationship with Saudi Arabia, while encouraging the country to recycle its dollars back into the U.S. economy.

Washington also wanted to ensure there wouldn't be a repeat of the 1973 embargo, which sparked a destabilizing wave of inflation and an economic and stock-market crash.

According to Donovan and others who emerged on social media to debunk the conspiracy theories, a formal agreement demanding that Saudi Arabia price its crude oil in dollars never existed. Rather, Saudi Arabia continued accepting other currencies – most notably the British pound (GBPUSD) – for its oil even after the 1974 agreement on joint economic cooperation was struck. It wasn't until later that year that the Kingdom stopped accepting the pound as payment.