The PetroBit: The Future of Oil Settlements
The Petrodollar’s Legacy
In the 1970s, a pivotal agreement between the United States and Saudi Arabia established the petrodollar system. Oil was priced and traded in U.S. dollars, with Saudi Arabia investing surplus revenues in U.S. Treasury bonds. This arrangement solidified the dollar’s dominance in global trade, granting the U.S. significant economic and geopolitical influence. Today, however, the system faces challenges. Geopolitical tensions, technological advancements, and a landmark meeting in Riyadh in May 2025 between President Trump and Middle Eastern leaders signal a shift. The PetroBit—Bitcoin as the backbone of oil trade and a neutral global reserve currency—offers a compelling path forward, both as a response to current fractures and a framework for collaborative prosperity.
A New System for a Fractured - or United - World
The dollar’s role as the world’s reserve currency is increasingly contested. Sanctions, asset seizures, and exclusions from systems like SWIFT have raised concerns among nations and corporations reliant on a currency subject to unilateral control. Recent actions, such as frozen reserves and trade restrictions, have driven oil-producing countries to explore alternatives. The Riyadh meeting, where President Trump and Middle Eastern leaders discussed Strategic Bitcoin Reserves, underscored this momentum. Beyond competition, the talks highlighted a shared vision: a neutral, decentralized system that benefits all parties.
The PetroBit embodies this vision. Bitcoin offers an inflation-resistant asset free from any single nation’s control. Its monetary network enables direct, censorship-resistant transactions, ideal for oil settlements in a geopolitically volatile world. By adopting Strategic Bitcoin Reserves, nations like Saudi Arabia, oil and gas companies, and their trade partners can build a transparent system. The Riyadh discussions laid a foundation for this collaborative future, positioning Bitcoin as a cornerstone of global trade.
Addressing Bitcoin’s Volatility
Bitcoin’s price volatility poses a challenge for its use in high-value transactions like oil settlements. A $100 million deal could lose/gain significant value if Bitcoin’s price fluctuates sharply. A practical solution is to leverage the Bitcoin network as the settlement layer while anchoring transactions to dollar-backed stablecoins or dollars at either end. For example, a buyer pays in dollars or a stablecoin, which converts to Bitcoin for secure, instant transfer across the network—using the main chain, Lightning Network, or solutions like Ecash or Cashu—before converting back to dollars or a stablecoin for the seller. This approach ensures stability while harnessing Bitcoin’s speed and security. Additionally or alternatively, financial market instruments, such as futures or options, can be used to hedge spot transactions to mitigate day to day volatility.
Over time, Bitcoin’s volatility is likely to decrease. A circular Bitcoin economy, built on a Bitcoin standard where businesses, governments, and individuals use it for trade and investment, would stabilize demand and prices, much like gold over centuries. Until then, stablecoins or dollar pegs serve as a bridge, enabling oil companies to adopt Bitcoin’s network without exposure to price swings, paving the way for its role as a global reserve currency.
An Evolving Regulatory Landscape
Regulatory barriers to Bitcoin adoption are steadily diminishing. In the U.S., relaxed banking regulations now permit financial institutions to custody and transact in Bitcoin. Proposals for government-held Strategic Bitcoin Reserves reflect growing acceptance. The U.S. Securities and Exchange Commission has also clarified guidelines, facilitating the launch of spot Bitcoin ETFs that have attracted billions in institutional capital. Globally, nations like El Salvador have embraced Bitcoin as legal tender, while the Riyadh meeting signaled Middle Eastern interest in using Bitcoin to diversify from dollar-centric systems.
This evolving landscape creates opportunities for the energy sector. Bitcoin’s dual nature—as a commodity mined with energy and a payment network for instant, intermediary-free transactions—aligns with the operational strengths of oil and gas companies. As regulatory hurdles fade, the industry is well-positioned to pioneer the PetroBit.
Energy’s Role in the Bitcoin Transition
The oil and gas sector is uniquely equipped to drive the PetroBit forward. Many companies are already integrating Bitcoin into their operations, from accepting it for payments to using it as collateral or mining it with surplus energy. Bitcoin mining, which requires energy and specialized equipment, mirrors the resource extraction processes familiar to the industry. Firms like Crusoe Energy, for instance, convert flared gas into Bitcoin mining power, reducing emissions while generating revenue. These efforts highlight Bitcoin’s compatibility with energy operations. In short order, oil and gas corporations with a desire and need to outperform their peers will add Bitcoin to their balance sheet, in lieu of underperforming projects, M&A activity, share buybacks, or increasing dividends.
Extending Bitcoin to oil settlements is a natural progression. The Bitcoin network—whether via the base layer, Lightning Network, or tools like Ecash—enables direct, instantaneous transactions, eliminating counterparty risk and intermediaries. For oil-producing nations, it offers a shield against sanctions and a means to diversify from dollar-denominated assets. The Riyadh meeting reinforced this potential, with Middle Eastern leaders exploring Bitcoin’s role in trade. By embracing the PetroBit, energy companies can lead a transformation that bridges physical commodities and digital finance - the digital transformation of capital.
Financial Advantages for Oil and Gas
Adopting Bitcoin for settlements delivers significant financial benefits for oil and gas companies. A decade of misplaced investment in “blockchain” technologies has been a costly distraction—Bitcoin has always been the solution. Traditional dollar-based trades often involve delays, tying up capital and introducing credit risk. Bitcoin’s network settles transactions in minutes, unlocking working capital that can be reinvested in exploration, production, or shareholder value. This enhanced liquidity strengthens financial flexibility in a capital-intensive industry.
Moreover, Bitcoin reduces reliance on intermediaries. Banks and payment processors typically charge 1-3% per transaction. Bitcoin’s network slashes these costs to negligible levels, with savings compounding across high-volume trades. The network’s transparency also streamlines treasury operations, reducing administrative overhead.
Holding Bitcoin as a reserve asset further bolsters financial resilience. With fiat currencies vulnerable to debasement, allocating a portion of capital to Bitcoin—as companies like Strategy have done—safeguards balance sheets. This strategy not only protects against currency devaluation but also positions firms as forward-thinking, appealing to investors. For oil and gas companies, the PetroBit offers cost savings, improved working capital, and a competitive edge.
A Collaborative PetroBit Framework
The PetroBit system can secure long-term interests for the United States, Saudi Arabia, and global partners through a structured arrangement. In this hypothetical framework, both nations establish Strategic Bitcoin Reserves: the U.S. builds its reserve through purchases and mining partnerships, while Saudi Arabia allocates a portion of oil revenues to Bitcoin, diversifying from dollar-heavy assets. Other oil-producing nations, like the UAE, and trading partners, like China, join by creating their own reserves, forming a network that stabilizes Bitcoin’s value and backs trade.
Oil settlements occur on the Bitcoin network, using dollar-backed stablecoins or dollars at transaction ends to manage volatility. A U.S.-Saudi bilateral agreement, formalized post-Riyadh, commits to settling an initial 20% of oil trade in Bitcoin, scaling up over time. Both countries invest in settlement infrastructure, such as Lightning Network nodes and Cashu mints, ensuring scalability and privacy. A PetroBit Council, co-led by the U.S. and Saudi Arabia, sets global standards for reserves and settlements, inviting other nations to participate.
For the U.S., this strengthens economic resilience and maintains geopolitical influence by integrating dollar-pegged stablecoins, countering de-dollarization efforts. Saudi Arabia gains trade flexibility, sanctions resistance, and alignment with Vision 2030’s modernization goals, while monetizing excess energy through Bitcoin mining and parking cash flows in Bitcoin. Other stakeholders—oil producers, trading nations, and energy firms—benefit from lower costs, diversified reserves, and a stable, transparent trade system. This collaborative framework, rooted in shared reserves and neutral settlements, positions the PetroBit as a win-win for global finance.
The PetroBit: A Collaborative Future
The petrodollar system, once a pillar of global finance, is losing ground amid geopolitical and technological shifts. The PetroBit, powered by Bitcoin, is poised to take its place. The Riyadh meeting illuminated this potential, envisioning a world where Bitcoin facilitates oil trade and unites nations in a neutral, decentralized framework. Strategic Bitcoin Reserves could anchor this system, fostering stability and trust among trade partners. For energy companies, the PetroBit promises lower costs, reduced risks, and a leadership role in a financial revolution.
The PetroBit fulfills Bitcoin’s original vision: a peer-to-peer monetary system where value moves instantly on a network no one controls. With stablecoins or dollar pegs mitigating volatility and adoption accelerating, the oil and gas sector can drive this transformation. The petrodollar defined the 20th century, but the PetroBit—collaborative, resilient, and innovative—will shape the 21st. As alliances shift, and geopolitics ebb and flow between adversarial and collaborative, Bitcoin remains the ideal solution in any environment.
O21 Solutions
Companies ready to act can partner with O21 Solutions to navigate the Money Transition and develop a tailored Bitcoin strategy. Our expertise enables us to help companies assess their unique capabilities, competencies, and needs relative to Bitcoin, creating and implementing a strategy to ‘get off zero.’ This approach is customized to each company’s long-term strategic objectives, whether adopting Bitcoin as a treasury asset, integrating it into operations, or incorporating it into service offerings.
Mathieu Agee, Founder, O21 Solutions LLC
