Petrodollars

DEFINITION of 'Petrodollars'

The money earned from the sale of oil. The term "petrodollars" was coined when the price of oil rose sharply in the 1970s. It resurfaced in the new millennium, when prices rose once again. Although petrodollars initially referred primarily to money that Middle Eastern countries and members of OPEC received, the definition has broadened in recent years.

BREAKING DOWN 'Petrodollars'

Petrodollars are the primary source of government revenue in many Middle Eastern countries. In fact, these funds represent a massive amount of investment capital and, in fact, are often traded on the eurocurrency market. They are also used for development purposes. In the 1970s and 1980s, Bahrain was able to improve its industrial capacity through the use of petrodollars.