I’m undertaking a 1000-day reinvention project, blogging here daily to track my progress. In Sunday Planning, I plan for the week ahead.
Today I’m not writing about my own plans but global plans, as I understand them.
Over time, every human faces their own deterioration and death. And civilizations as well face that, but on longer time frames.
In The Fourth Turning is Here, author Neil Howe writes of “the modern wheel of time”:
From the Grim Reaper of the Christians to the blood-drenched Kali of the Hindus, humanity has traditionally viewed time darkly. Time, we realize, must issue in our dissolution and death. Its passage is destined to annihilate everything familiar about our present—from such trivial pleasures as a morning cup of coffee to the grandest constructions of art, religion, or politics. “Time and his aging,” observed Aeschylus, “overtakes all things alike.”
But it’s not just time that brings about destruction. War does too. This morning the U.S. president issued Iran an ultimatum that he would order the bombing of their power plants unless Iran opens the Strait of Hormuz. In return, the Iranian operational command issued a warning that, if their energy infrastructure is hit, they will strike all U.S.-linked energy, IT, and desalination infrastructure in the region, to include facilities in the UAE, Saudi Arabia, and Qatar.
In modern times, targeting a country’s power infrastructure is considered a war crime. Russia’s systematic targeting of the Ukrainian power grid since its invasion of Ukraine in 2022 has been formally labeled a war crime by the UN and the International Criminal Court (ICC). That’s because International law makes a distinction between military objectives and civilian objects. Combatants are not generally allowed by such law to target facilities and other infrastructure that supports civilian life.
But the U.S. is desperate right now. While the administration has said “we don’t need the oil that passes through the Strait,” what they do need is a continuation of the petrodollar system. And their aggressions have led to a severe weakening that could result in its collapse, bringing the current U.S. economic glory to its end.
The safe corridor option and what it means for the petrodollar system
As the U.S. president issues threats, several governments including India, Pakistan, Iraq, Malaysia, China, and Japan are in talks with Tehran to negotiate passage through the Strait of Hormuz. Reportedly at least nine ships have already used the new de facto safe shipping corridor, and Iran is in the process of creating a more formal approval process. In at least one case, one tanker operator is said to have paid a fee of $2 million for the right to pass in safety.
The US is unlikely to allow this situation to stand. The U.S. president has repeatedly said, “We don’t use the Strait… we don’t need it,” citing the fact that the U.S. is a net exporter of oil. But he may now see that a partial closure of the Strait affecting only close allies Israel and European countries leaves him worse off. While he may have had a strategy (or post-hoc realization) that a Strait of Hormuz closure could be the wedge he needs to raise the United States up over China, he might have a burgeoning awareness that, paradoxically, he’s raised China up in power.
This conflict could dismantle the petrodollar system in which global oil is traded exxclusively in U.S. dollars. There were reports last week that Iran has made settlement using the Chinese Yuan (RMB) a condition of using the safe corridor they are establishing in the Strait. If a country wants oil and safe passage, they must bypass the U.S. banking system (Swift) and pay in Yuan.
The petrodollar system gives the United States unparalleled control of trade. Much of the international payments ecosystem for all trade, not just in oil, is exposed to American control. Washington can monitor, delay, freeze, or penalize transactions passing through dollar-clearing channels.
This system developed in the 1970s, after President Nixon took the dollar off the gold standard. The 1973 oil embargo as a response to the Yom Kippur war caused energy prices to skyrocket. To save the dollar’s value, Nixon and Henry Kissinger struck a deal with Saudi Arabia. Saudi Arabia and eventually all of OPEC agreed to price and sell their oil exclusively in U.S. dollars. In exchange, the U.S. provided Saudi Arabia with high-tech military protection and guaranteed the safety of their oil fields (a guarantee that the current U.S. president has reneged on). The Saudis agreed to take their excess dollar profits and recycle them back into the U.S. by buying U.S. Treasuries, effectively financing American debt.
This created a permanent global demand for the dollar. Every nation on earth needs oil to run their economy. They are forced to hold massive reserves of U.S. dollars just to pay for energy. It allows the United States to “print” money to pay for its debts. It means lower interest rates on U.S. bonds compared to other government bonds. And, crucially, it allows the U.S. to use the SWIFT payment clearing system to turn off any country’s economy by blocking their access to dollars.
The fourth turning
I started this blog post with a quote from The Fourth Turning is Here, a book by Neil Howe applying his and William Strauss’ theory of how American (and other nation’s) histories play out in recurring eighty to one hundred year cycles. Howe theorizes that we are in the fourth of “four turnings” or seasons in one of those long cycles. Fourth turnings bring great upheaval and crisis and the tearing down of the existing institutional order, paving the way for national rebirth.
For fifty years, the world has accepted a system where the United States could print money to fund its military and debts because everyone had to buy dollars for oil. If Iran, China, and the BRICS+ (Brazil, Russia, India, China, South Africa plus Egypt, Ethiopia, Iran, and UAE) successfully move large portions of the oil trade to the Yuan or another currency, the “exorbitant privilege” that the United States has enjoyed will disappear.
We may see the development of a multipolar energy market. The US-Israeli bloc will have isolated themselves, and will rely upon U.S. domestic production, but with massive internal inflation due to cutting themselves off from the global oil market. The Eurasian Bloc will trade in Yuan and local currencies, maintaining flow through the Strait via side deals with Iran.
Even before this, there was already oil trade happening via the Yuan and not the U.S. dollar. China is home to many small independent oil refineries known as “teapot refineries.” Before this year, these refineries handled about 90% of Iran’s sanctioned oil exports and a huge chunk of Russia’s. They paid in Yuan via the CIPS (China’s version of SWIFT). They could buy oil at massive discounts — $8 to $10 a barrel below market price.
Now the United States aggression against Iran has driven this trade out into the open. The U.S. has issued a 30-day sanctions waiver to allow some Iranian gas out into the market, in an attempt to lower gas prices at home. Meanwhile, many nations are lining up to pay Yuan to get oil and other commodities through the Strait.
What about Europe?
The U.S. administration expected that they could recruit Europe to help them after starting hostilities, because Europe would have no other choice. Unlike the U.S., they depend on oil and gas coming through the Strait of Hormuz. So even though they weren’t apprised of the U.S. plans to strike Iran, they would have to join later. So the thinking went.
But the European Union, who no longer trust the U.S. after economic hostility in the form of tariffs, declared they had no appetite to expand their current naval missions into the Strait of Hormuz. Some European leaders have characterized the assassination of Iranian supreme leader Khamenei and illegal and destabilizing to the European economy.
A group of nations including the U.K., France, Germany, Japan, Canada and many others issued a declaration on March 20th condemning Iran’s attacks on unarmed commercial vessels and de facto closure of the Strait of Hormuz. They called on Iran to cease its threats, drone and missile attacks, and other attempts to block the Strait to commercial shipping. They further called for a moratorium on attacks of civilian infrastructure, to include oil and gas installations.
Meanwhile, since “Liberation Day” — the day that the U.S. President declared large unilateral tariffs on every nation in the world — the EU has concluded that China is a “more reliable counterpart” for trade agreements than the U.S., who is “unleashing bedlam.” Trade between the EU and China surged in the first two months of 2026.
How will it play out?
Strauss and Howe argue that every Fourth Turning has a climax, a moment of maximum danger where the fate of the nation is decided. Are we reaching a climax right now? The theory says that there must be a decisive resolution to a conflict such as the one we face right now: either the total submission of Iran (which the U.S. President has demanded) or, perhaps, a total war that reshapes the world map.