This chapter argues that the strain of the war created a risk that the U.S. would scale back its security guarantees to the hosts of the energy market. Instead, the U.S. would rely on non-state actors within the hosts’ territory, which would ultimately undermine the hosts’ territorial sovereignty. The threat that the U.S. would adopt this alternative strategy ultimately compelled several of the host states into actively fighting their terrorists, before they lost all American support. While this solved the moral hazard problem, it also created a negative consequence for the U.S., in that it weakened the strategic credibility of the American security guarantee. This in turn led host states to question whether or not they should continue to cooperate with the U.S. in maintaining the petrodollar system.
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