Examining the Dynamics Between U.S. Energy Dominance and Currency Exchange Rates

But, as the poet said, the times they are a-changin'. As non-OPEC oil producers grow and energy dominance changes hands, exchange rates could see profound levels of volatility – including USD. Meanwhile, with its stated plan to re-emerge as a dominant oil producer, the U.S. aims to become a net energy exporter and achieve energy independence.

Beginning with the evolution of U.S. energy dominance in the mid-20th century, this four-part series examines how the past and present of global energy markets continue to effect international trade and, especially, currency exchange rates.

Part 1: The Evolution of U.S. Energy Dominance and Its Potential Effects on Exchange Rates

Over the course of history, the U.S. has held dominance in the global energy market in one way or another. From control of the oil supply to the supply of U.S. dollars, the U.S.'s role in energy markets has affected exchange rates – especially because all globally traded energy sources, including oil, are traded in USD. The first article in the series explores the ways current global energy market trends may affect exchange rates, with regard to the U.S. government's energy dominance strategy.

Part 2: The Erosion of OPEC and a Rising "Petroeuro" Threaten the Dollar Exchange Rate

Historically, USD's exchange rate stability and prevalence as the world's premier currency has largely been upheld through "petrodollar recycling" between the U.S. and foreign oil producers via an arrangement with the Organization of Petroleum Exporting Countries (OPEC). But of late, non-OPEC oil producers are flourishing while the EU has become the world's largest oil importer. Here's how the potential rise of a "petroeuro" may lead to uncertainty for the "petrodollar" and, therefore, USD exchange rates.

Part 3: What the U.S. Becoming a Net Energy Exporter Could Mean for Exchange Rates

As the U.S. plans to re-emerge as a net energy exporter, this article explores impacts on a far-more complex global energy market than ever before and the potential effects on global energy markets and, especially, for USD exchange rates.

Part 4: What Would U.S. Energy Independence Mean for USD Exchange Rates and Import-Export Businesses?

Part of the U.S. government's global energy plan includes the goal of achieving "energy independence," or being self-sufficient without a need to import energy. This could result in cheaper energy for U.S. businesses. But due to the size and scope of the U.S. economy and USD's role in the global economy, U.S. energy independence might change the course of international import-export business.