The Dollar being used for oil transactions provides a degree of confidence and stability in the currency without being explicily tied to the value of a commodity.

This allows the US to engage in flexible monitary policy without running as much of a risk of severe inflation or deflatation, as even if the dollar loses some value, people will not be prone to quickly dump all of their dollars in favor of some other currency.

Well, imagine you and your friends like to play a game where you trade toys with each other. If everyone agrees to use marbles as the currency for this game, it becomes easier to trade toys because you all know how much marbles are worth.

Now, imagine that many countries around the world trade oil with each other. They also need a currency that they all agree is worth something, so they can trade oil easily. For a long time, they agreed to use the US dollar as the currency for trading oil. This means that when countries buy or sell oil, they use US dollars to do it.

If countries only buy oil in dollars they need to get dollar from somewhere. They need to sell something else and get paid in dollars.

This is and advantage if you have dollars.

Furthermore since the price of both dollars and oils goes up and down all the time, you don't wan to exchange your own currency or sell stuff for dollars at a bad time.

You wan to get dollars while they are cheap and use them later when you can buy oil with those dollars cheaply.

This requires you to keep a certain amount of dollars in reserve.

Dollars that you don't actually use to do anything with them but keep nonetheless available to you if you need it.

This all adds up to people need dollars much more than they would otherwise.

Supply and demand happens and since so many people have a demand for dollars you can add more supply without making it worth less.

It is all much more complicated than that, but it all adds up to a huge advantage for the US and the people in the US who have money.

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The US maintains the trade of oil for dollars at the point of a gun.

They do this because it allows the US to create a perpetual demand for dollars worldwide. That demand maintains the value of the currency.

This allows for unequal exchange, where the US can purchase goods from around the world for significantly less than they are worth, maintaining poverty and thus cheap labor around the world.

It also simultaneously allows the US to maintain trade deficits without losing the value of its currency. Thus Americans can consume multiple times what other people around the world consume without having to actually produce it. It also allows US people to have an advantage in any transaction abroad.

All currency is convertible to another currency. The arguments that somehow accounting for fluctuating currencies makes the system easier ignores that the US dollar fluctuates in value just as every other currency does. The real reason for this arrangement is that it is a major part of US economic hegemony.

When the US controls oil via its financial systems and enforces this rule militarily, the US becomes, in a sense, the de facto ruler of the world as oil is a necessary resource for every modern economy.

The reason we are starting to see this break down is because the Chinese have shifted the world's economic center of gravity eastward while alternative forms of energy are becoming more and more viable. Oil will have to be abandoned for climate change eventually, so it makes sense for other countries to start pushing back now, rather than waiting for later.

It should be clear that the USD being the forced currency for oil is a great arrangement for the US and a shitty one for everyone else.

A country has control over transactions made with its currency. If all the oil in the world is bought and sold in dollar, the USA can allow or disallow every oil transaction in the world, which means they can cut off oil from anyone they want to.