**[Saudi Leads "Mecca Agreement," Petrodollar System Faces New Trust Test]** BlockBeats News, August 26: Saudi Arabia has recently been working with Turkey and Pakistan to promote the "Mecca Agreement" and is considering inviting Iran to join, sparking market discussions about the future of the Middle East security landscape and the "petrodollar" system. Analysts believe that the significance of this arrangement may not simply lie in strengthening regional military cooperation but rather reflects the efforts of some Middle Eastern countries to reduce their reliance on U.S. security guarantees. The "Mecca Agreement" envisions the establishment of a collective security mechanism among member states, whereby an armed attack on any member state would be considered an attack on all members. If Iran ultimately joins, this mechanism would bring Saudi Arabia, Turkey, Pakistan, and Iran under the same security framework, forming a regional cooperation network that spans Sunni and Shia-majority countries. This shift also touches on the core logic of the petrodollar system. For decades, the U.S. has maintained a mutually binding relationship with Gulf oil-producing countries by providing military security guarantees, while these countries price oil in dollars and allocate a portion of their dollar revenues into U.S. Treasury bonds and other dollar-denominated assets. Middle Eastern countries sell oil for dollars, then allocate part of those dollars into U.S. assets, while the U.S. sustains this cycle through security commitments. Now, with the worsening security situation in the Middle East and ongoing U.S.-Iran tensions, some countries are beginning to reassess the U.S.'s ability to provide regional security guarantees. If Gulf countries gradually establish more diversified security and financial cooperation systems in the future, their willingness to continue settling oil in dollars and allocating substantial oil revenues into dollar assets may be affected. In the short term, dollar hegemony remains difficult to replace, and the U.S. Treasury market is unlikely to experience structural reversals due to a single regional agreement. However, from a long-term perspective, if the U.S. cannot consistently provide security guarantees that match the international status of the dollar, the trust of Middle Eastern oil-producing countries in the dollar system may gradually erode. This could become a potential risk that warrants attention for the dollar, U.S. Treasuries, and the global reserve currency landscape. [Original Link]