The petrodollar system is an informal global arrangement where international oil trade is conducted primarily in US dollars.
While its roots go back to the 1950s, the system was cemented in the 1970s through an agreement between the US and Saudi Arabia. Saudi Arabia agreed to price oil exclusively in dollars, and in return, the US provided military protection.
This system has helped the US dollar maintain its dominance as the world's primary reserve currency and the medium of international trade.
As an oil-importing country, Bangladesh must purchase US dollars to pay for oil imports, putting pressure on foreign exchange reserves — a direct consequence of the petrodollar system.