Israel and the Petro-Dollar
Israel as a "unsinkable aircraft-carrier" for the U.S.
In our previous discussion, we talked about how Israel's patronage shifted from Britain to the United States after the 1956 Suez Crisis. This shift affected Israel's political and military ties and had a big impact on global politics. A key part of this new relationship is how the U.S. sees Israel as an "unsinkable aircraft carrier" — a strong and reliable ally in the Middle East, especially when it comes to oil and the U.S. dollar system.
U.S. Geopolitical Framework
In many ways, Israel has become more than just an important ally for the United States. Over time, it turned into a kind of strategic base in the Middle East — a safe and reliable place for the U.S. to support its interests in the region. Later, Israel also became important in internal U.S. politics, with the rise of the Israel lobby, which we'll talk about in another article.
In this piece, I’ll just focus on Israel’s role in military and strategic terms for USA. This means Israel helps USA project its power by hosting military facilities, sharing intelligence, and staying a steady partner in a very unstable region, which is also home to much of the world’s oil reserves.
The Petro-Dollar System
The petro-dollar system was established in the early 1970s, after the United States and Saudi Arabia reached an agreement that ensured oil would be traded exclusively in U.S. dollars. This deal, often referred to as the "golden triangle," involved the U.S. providing military protection and political support to Saudi Arabia, while the kingdom agreed to price its oil exclusively in U.S. dollars. The immediate effect of this arrangement was a surge in demand for the dollar, as nations worldwide needed it to buy oil.
By the 1980s, Israel had become an even more important U.S. ally, especially in helping support the petro-dollar system. Its location—right in the middle of oil-rich countries—made it a key part of keeping U.S. influence strong in the region.
Israeli politicians, like Ehud Barak, often described Israel as a “villa in the jungle” — a phrase that wasn’t just political rhetoric, but also deeply rooted in racist and orientalist views of the Middle East. This framing painted Israel as a civilised, Western outpost surrounded by chaos, reinforcing harmful stereotypes and justifying ongoing U.S. support.
Israel thus became a central part of U.S. strategy — not only by helping secure vital oil routes and energy infrastructure, but also by acting as a counterweight to countries like Iran and Iraq, which were seen as threats to both the oil trade and the stability of the petro-dollar system.
Unsinkable Aircraft Carrier
Israel’s military strength has become a key part of how the U.S. operates in the Middle East. Over the years, Israel has acted like a base for American forces, helping with military missions and intelligence work. As tensions in the region have grown, this role has become even more important. Israel now serves as a launch point for U.S. airstrikes, secret missions, and other military actions — all helping to protect oil routes and support the U.S. dollar’s leading role in global trade.
One of the clearest examples of this partnership came during the Gulf War in 1991, when U.S. forces launched operations from Israeli territory to help protect Kuwait’s vital oil reserves. This military cooperation showed how Israel's location could directly support American control over energy resources in the region.
Israel’s position—near major oil producers and close to key transport routes—also allows the U.S. to influence both the politics and logistics of the global oil trade. Through its strong alliance with Israel, the U.S. ensures its voice is present in discussions about oil production, pricing, and transport, especially in times of crisis.
A Driving Force
As the U.S. faces growing challenges from countries like China and Russia, Israel remains a critical ally in protecting American interests in the Middle East—particularly the petro-dollar system. For decades, the U.S. has seen Israel not just as a partner, but as an extension of its influence in the region, helping keep global oil markets tied to the U.S. dollar.
This partnership has only deepened with Israel’s technological advances, especially in cybersecurity and defence. These capabilities help the U.S. protect key energy infrastructure and prevent disruptions that could shake global markets. Israel’s strong military and intelligence services also make it a key player in securing energy resources and responding to threats in areas where U.S. oil interests are at risk.
Israel as a Cornerstone of U.S. Strategic Interests
The U.S.–Israel alliance is not just about shared values or military aid—it is a core part of America’s global energy strategy. Israel acts as a reliable base, or “hangarship,” that supports the U.S. in maintaining dominance over the petro-dollar system and securing its role in the global economy.
As energy dynamics shift and new players emerge, Israel’s importance to the U.S. is likely to grow. Their alliance highlights how deeply political, military, and economic interests are linked in shaping the modern Middle East—and how central Israel remains to the U.S.'s place in that picture.
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Article Series Zionism
