“De-dollarization” was a major market story in 2024 and 2025, not because it was true, but because it sounded plausible enough to scare people out of the most in-demand assets. The reality was much simpler. The US dollar remains the world’s global reserve currency because there is no fiat alternative.

The US dollar index is rising and global demand for US dollar assets soars because there is no better option in the fiat world. For a currency to be a world reserve asset, it needs to operate with ample liquidity, a transparent financial system, economic freedom, and independent institutions. People who do not understand money promote the fantasy that currencies with capital controls, opaque financial systems, and even exchange fixing can substitute the US dollar.

Investors are concerned about the Iran war and its impact on the economy. This is something that has been well analysed.

However, we must remind that the largest risk may not come from an energy prices shock, which futures discount as temporary, but from another set of policy mistakes from governments and central banks.

If governments decide to spend and print to present themselves as the solution to the Iran war impact, and central banks decide to hike rates due to a geopolitical event that has nothing to do with credit demand and money supply, the stagflation risk may appear.

However, the two trillion-dollar crisis that no one seems to be concerned about may be more relevant: A private debt crisis.

The current oil and commodity price shock has created an interesting pattern: The futures curve has moved further into backwardation, and market participants are shrugging off the headlines, discounting a short-term inflationary burst that would be rapidly corrected.

We should expect disinflationary pressures to dominate after the current energy shock, rather than a prolonged inflation crisis. The mix of a backwardated oil curve, a shrinking money supply, slow money movement, and a strong US dollar suggests that once the temporary rise in crude prices goes away, we should see lower, not higher, overall inflation.

Recent geopolitical tensions have pushed crude above $100 per barrel (Brent), reviving fears of a new inflation wave. However, the structure of the oil market shows that this is being priced as a short‑lived supply disruption, driven by a geopolitical risk and scarcity premium in the front end, not a persistent shock.

Europe is heading toward a new and potentially worse energy shock because it wasted the respite after 2022, relying on warm winters and U.S. LNG instead of reversing nuclear shutdowns, relaxing bans on resource development, or ensuring long-term gas supply security. The current crisis is being triggered by the escalation of the Iran conflict and disruptions in the Strait of Hormuz, with Kuwait and Qatar declaring force majeure, shutting down key production like Ras Laffan, and driving Brent above 100 dollars and TTF gas prices up more than 50% in a week, while European storage sits at low levels heading into the critical injection season.

At the same time, Europe is losing a global bidding war for LNG cargoes to Asia, faces self‑inflicted vulnerabilities from Spain’s diplomatic clashes with both the United States and Algeria, and remains dangerously exposed to a full Russian gas cutoff despite claims of diversification. A combination of Middle East disruptions, reduced U.S. volumes, and a Russian shutdown would likely mean rationing, deeper industrial recession—especially in Germany—and double‑digit energy cost inflation, revealing how ideological energy policies, nuclear phase‑outs, and regulatory obstacles have left Europe fragile just as oil heads toward 90–100 dollars and gas prices again soar.