BlockBeats message: On August 26, Saudi Arabia has recently been pushing the “Mecca Accord” with Turkey and Pakistan, and is also considering inviting Iran to join, sparking market discussion about the future of the Middle East security landscape and the “petrodollar” system. Analysts believe the more important significance of this arrangement may not be solely about strengthening regional military cooperation, but rather reflecting that some Middle Eastern countries are seeking to reduce their single, exclusive reliance on US security guarantees.

The “Mecca Accord” envisions establishing a collective security mechanism among member states: any armed attack on a member state would be considered an attack on all members. If Iran ultimately joins, this mechanism would bring Saudi Arabia, Turkey, Pakistan, and Iran into the same security framework, creating a regional cooperation network spanning Sunni and Shia countries.

This change also touches the core logic of the oil-dollar system. For a long time, the U.S. has formed a mutually reinforcing relationship by providing military security guarantees to Gulf oil producers such as Saudi Arabia, which ties in with oil priced in U.S. dollars and the allocation of U.S. dollar assets. Middle Eastern countries sell oil to obtain U.S. dollars, then allocate part of those dollars to dollar-denominated assets such as U.S. Treasuries, while the U.S. maintains this cycle through security commitments.

Nowadays, as the security situation in the Middle East deteriorates and the United States continues to confront Iran, some countries are beginning to reassess the ability of the U.S. to provide regional security guarantees. If Gulf countries in the future gradually build a more diversified system of security and financial cooperation, their willingness to continue pricing oil in U.S. dollars and allocating large portions of oil revenues to dollar-denominated assets may be affected.

In the short term, U.S. dollar hegemony is still difficult to replace, and the market for U.S. Treasuries will not undergo an immediate structural reversal due to a single regional agreement. However, from a long-term perspective, if the United States cannot continue to provide security guarantees that match its international dollar status, Middle Eastern oil-producing countries’ confidence in the dollar system may gradually decline. This could become a potential risk that the dollar, U.S. Treasuries, and the global reserve currency framework need to watch.