These kinds of shifts in currency regimes, like after WWII when the dollar replaced the pound sterling, can be sudden and triggered by major geopolitical or economic collapses. Over the past few years, we’ve seen a gradual erosion in the dollar’s global dominance. Its share in world trade and reserves has declined, mostly in favor of the euro. If Trump’s policies lead to a major political-economic crisis, then yes, a very sudden shift in the dollar’s role is possible. That would be harder to predict, but not impossible.
Could the bond market’s recent volatility be a major threat to oil markets?
The bond market is a real risk. Look at what happened to Liz Truss in the UK, her policies caused a bond market crisis that ultimately ended her premiership. While the US bond market is more resilient, similar risks exist if the country continues down a politically and economically irresponsible path. A bond crisis could lead to a wider economic collapse, and that would impact the oil markets. That’s the big economic concern looming right now.
Could Trump broker a deal with Iran, and how might that impact oil markets?
There are divisions in the Trump camp, some are hawks, but Trump himself likely wants a deal. Oddly enough, his lack of diplomatic structure might help. He may be willing to give up more just to get a headline victory, especially with no wins coming from Ukraine or Gaza. That could make Iran the most realistic opportunity for a big announcement. Despite major gaps in issues like uranium enrichment, there might still be a face-saving compromise. If that happens, Iran could bring back 300k–400k barrels per day. That’s mildly bearish, but it won’t dramatically change the market.