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00:00The 15th of March 2026 marked a historic day as oil aboard the Pakistani-owned tanker Karachi
00:06passed safely through the Strait of Hormuz, denominated not in US dollars but in Chinese
00:12yuan. That same day, another vessel also went through, carrying crude on a yuan-aligned route.
00:18But it challenges an agreement which has underpinned the very foundation of America's
00:22economy, the petrodollar. In return for American protection, the Gulf states,
00:26these six countries here, would prop up American interest and sell their oil in dollars.
00:32But a deal that was supposed to secure American dominance instead handed a small group of
00:37countries extraordinary leverage over the most powerful country on earth. Since the US and
00:42Israel wiped out Iran's supreme leader, a wave of attacks have spread across the region.
00:47The Gulf states didn't sign up for this. For 50 years, their deal with America has held. But right
00:52now, for the first time, the very countries propping up the American economy are watching
00:57the terms of that bargain fall apart. So what happens when they decide to stop playing ball?
01:02Maybe not an immediate collapse, but a slow bleed, and one that could bring America's
01:06era of global dominance down with it.
01:09So, how did a handful of desert states end up with this much leverage over the most powerful
01:13country on earth? To answer that, you have to understand what they've built, and how quickly
01:19it can fall apart. In the last century, the Gulf states have gone through an enormous transformation,
01:24largely thanks to one thing, oil. Oil was first discovered in Bahrain in 1932, and within decades,
01:31the entire region was producing it. And by the 1990s, that oil money had completely transformed
01:37what these places looked like. Areas which had once been nomadic desert towns suddenly became
01:42sprawling metropolises. Dubai alone went from a modest trading port to a city of glass towers
01:47in barely a generation. But this wasn't just an economic boom, it reshaped how these countries
01:53were governed. Oil wealth was entirely state-controlled, which meant that everything, wages, subsidies,
01:59infrastructure, flowed from a centralised system financed by oil. And in exchange for political
02:05obedience, the government distributed enough of that wealth to keep people compliant. It's
02:10a social contract, just not a democratic one. And as long as it holds, it works. But the deal
02:16only holds if two things are true. The money keeps flowing, and the region stays stable.
02:21Which is why in recent decades, the Gulf states have made an enormous effort to diversify and
02:26rebrand. Saudi Arabia has poured hundreds of billions into tourism and entertainment. The UAE
02:32has marketed itself as a global hub for finance and innovation. And Qatar hosted the World Cup.
02:37These countries were no longer content to simply be oil exporters, they wanted to be players on the
02:42world stage. Today, tourism alone accounts for roughly 12% of Saudi's GDP, and around 12% of
02:48the UAE's. Dubai's international airport is the busiest in the world for international passages,
02:53and the region's sovereign wealth funds manage trillions of dollars in global, more importantly,
02:59American assets. But all of this, the skyscrapers, the airlines, the funds, is underpinned by one
03:05thing. The perception that this is a safe, predictable place to park your money and do business.
03:10And in just a matter of weeks, 30 years of building that perception came undone.
03:24After the US and Israel launched strikes on Iran, the country quickly retaliated.
03:29Civilian areas and military bases alike across the six nations of the Gulf were hit by missile strikes.
03:35The biggest oil refinery in the world was shut down. The biggest gas refinery in the world was
03:40shut down. And this is already costing the region around 6.7 million barrels per day. And at current
03:46prices, it's roughly a billion dollars every single day. And remember, these countries aren't
03:51democracies. There's no election to absorb public anger. The social contract in every one of these
03:56countries depends on the government being able to keep the money flowing and the streets safe.
04:00And when that breaks down, the regime itself is at risk. But here's the thing, these aren't
04:05powerless countries. They spent 50 years quietly building themselves into the load-bearing wall of
04:11the global economy. And if they decide America is threatening their survival, they have the tools
04:15to make Washington feel it. Combined, they control nearly a third of global oil output every year,
04:21with by far the largest share coming from Saudi Arabia. Even more importantly, they also control
04:26well over half of the world's oil reserves. Essentially, the price of oil is extremely dependent on
04:32whatever these countries decide to do or not to do. If they were to, say, threaten to cut production
04:37entirely for a sustained period of time, unless the US stops the invasion, they could send global
04:42energy prices soaring, which should be more than enough to pressure the United States into pulling
04:47back, or at the very least, discourage it from turning this into a long-drawn-out occupation.
04:52And time and time again, we have seen one of the main success metrics Trump uses is the markets.
04:57And Trump, in particular, ran a campaign promising to bring energy prices down.
05:01So having the opposite happen just before the midterm elections would be a political nightmare.
05:06If all of that sounds a bit extreme, it's worth remembering that a version of this has happened
05:10before. In 1973, in response to Western support for Israel during the Yom Kippur War, oil-producing
05:16Middle Eastern countries, led by Saudi Arabia, abruptly shut off the flow of oil to the US,
05:22drying up the steady stream of Middle Eastern crude that Western economies had come to depend on,
05:27and sending oil prices from $3 to $10 per barrel in just a couple of months.
05:32This kicked off nearly a decade of high inflation across the West, peaking at over 13% in the US.
05:38And before long, Washington began to soften its position, pushing for ceasefire negotiations,
05:43and eventually getting Israel to bring the war to an end.
05:46But while that leverage might have worked for the Gulf states a few decades ago,
05:49the truth is that the world looks very different today.
05:52For starters, the US is way less reliant on Gulf oil than it once was.
05:56Before the oil crisis, roughly a third of US oil came from the Gulf.
06:00Today, that number is closer to 10%.
06:02In addition to this, the US now produces more oil than any other country on Earth,
06:07and has actually become a net exporter to a number of countries.
06:10But whilst on the surface, this may seem like the Gulf's influence has been diminishing,
06:14in reality, since 1973, their power has only grown.
06:18In the last couple of weeks, America has unleashed its military strength.
06:22But the truth is that the superpower's biggest strength doesn't come from its weapons, but the dollar.
06:26As you may have heard before, the dollar is what's known as a reserve currency.
06:30Currencies used to be backed by physical commodities like gold or silver,
06:34but today they're essentially backed up by dollars,
06:36which make up around 60% of the world's foreign exchange reserves.
06:40If countries want to show that their currency has value, they need to hold dollars.
06:44Of course, that raises the question, if other countries use dollars to back up their own
06:48currency, then what's backing up the dollar?
06:51You'd expect it to be America's technology, its economy, or even its military strength.
06:56But in reality, it almost entirely comes down to a quiet agreement with the Gulf states from
07:00nearly 50 years back, one which created what's now known as the petrodollar.
07:04This is a pattern which comes in many forms, but pops up in the playbook of nearly every great
07:09power across history, and has the power to make or break them.
07:13At the start of the 19th century, Britain was the world's undisputed superpower,
07:17controlling a quarter of the entire world's land, and roughly 20% of the global economy.
07:22Because of that, global trade essentially revolved around the empire.
07:26Cotton from India, tea from China, rubber from Malaysia, all came into British ports.
07:31Now, when you're at the centre of a system like that, something interesting happens to
07:35your currency. People all over the world need it, not because they want pounds specifically,
07:40but because it's a common currency, that people from two different countries can use.
07:44And at its core, this creates one enormous advantage. You can borrow enormous amounts of
07:50money without the costs that would normally come with it.
07:53Essentially, all this new money doesn't flood your domestic economy. Instead, it gets absorbed
07:58by international demand. It's probably the most powerful advantage an empire can have,
08:03and it's why their governments and citizens can live beyond their means for so long.
08:06Today, the same thing happens with the United States dollar. No matter how much money the
08:11country prints, it continues to hold its position as the world's reserve currency and can avoid
08:16major inflation, at least for the most part. However, that only works as long as the rest
08:21of the world keeps wanting to hold your currency. The moment that confidence slips, the whole system
08:26unravels. For Britain, that demand was driven by trade, spices, cotton, raw materials. When the empire
08:32shrank, so did the need for pounds, and the system with it collapsed. For the United States,
08:38that demand is driven by one thing, oil. And making sure that demand for dollars continues
08:43is exactly why the Gulf states have become so important to the US. Remember, just a few of
08:48these countries control almost 30% of the global supply of oil. And right now, that supply is under
08:54direct attack. The entirety of the Gulf region has effectively been transformed into an active war zone,
09:00which has forced the six states to massively cut back on production. Then the Strait of Hormuz,
09:05a passage which one-fifth of the world's oil passes through, was effectively shut down,
09:09with 150 ships stranded, many of which would normally carry around 2 million barrels of oil
09:14a trip. These ships are effectively sitting ducks for Iranians to target,
09:18something they haven't hesitated to take advantage of.
09:28Okay, so it's worth keeping in mind that oil is one of the very few commodities that literally
09:32everybody needs. It goes way beyond just powering cars. It's the fertilizer that grows food,
09:38and the plastic that packages pretty much everything that we own. The Americans, of course,
09:42knew this. And they also knew that if they could tie their currency to something that the entire world
09:46needed to buy anyways, it could effectively guarantee an endless demand for dollars.
09:51So in the years following the 1973 oil crisis, the administration of Richard Nixon began quietly
09:57negotiating a deal with Saudi Arabia, at the time the world's most important oil producer.
10:03By 1975, the two countries had quietly struck a deal which would reshape the global economy for
10:08decades to come. At the heart of that deal was an agreement that oil would be exclusively traded in
10:14US dollars. And that changed everything. Consider a fairly typical transaction in the global oil
10:20market. Let's say South Korea wants to buy crude oil from the United Arab Emirates. Rather than
10:25simply buying it directly, they would first need to sell their own currency to buy dollars,
10:29which only then they could use to buy oil from the UAE. The currency of a country that isn't even
10:34involved in the transaction, the dollar, becomes the middleman for the entire deal. And when you
10:39start multiplying that across every country on earth trying to buy oil from the Gulf,
10:43the scale of it is enormous. Today, the global oil industry is worth 3.7 trillion dollars every
10:49year, about 3% of the world's GDP. And around 90% of that trade happens outside US markets,
10:56meaning trillions of dollars are constantly circulating around the world simply because
11:00countries need to buy energy, even if they have no particular interest in trading with the US directly.
11:06This has allowed the United States to import hundreds of billions of dollars of goods from
11:10around the world without ever really having to pay for it. Instead of sending back an equivalent
11:14amount of goods, the US sends fiscal assets like treasury bonds, all made from a currency it can
11:20literally print for free. But because foreign countries need dollars to buy oil, they're just
11:24about happy to let the US get away with it. In fact, the United States has run a trade deficit
11:28every single year since 1976, meaning for 50 years straight, it has taken more from the world than
11:35it is given back. In 2025 alone, that deficit came to nearly 900 billion dollars. Add all of these
11:41deficits up, and the US has accumulated roughly 26 trillion dollars in net foreign debt, goods and
11:47services all essentially paid for with paper. For ordinary Americans, that has effectively acted as
11:53a massive hidden subsidy, worth nearly 3,000 dollars per person every single year. It's what has allowed
11:59the American middle class to maintain living standards that, for most of the 20th century,
12:03were the envy of the world, all whilst funding the largest military in history. However, the flip
12:08side is that it also gives the Gulf states an enormous amount of leverage. If those countries
12:13ever decided to price their oil in something else, say the Chinese Yuan, or gold, much of the global
12:19demand that underpins the dollar's dominance would vanish. And right now, for the first time in decades,
12:25that possibility feels less theoretical than ever. Many of Trump's supposed Gulf Arab allies are already
12:31reviewing their investments in the states, just months after pledging trillions of dollars worth
12:35in investment. And the anger is barely being concealed. One Dubai billionaire publicly asked
12:41why the Gulf should bear the consequences of an escalation nobody had asked for, before quickly
12:46deleting the post. These are America's closest allies in the region, and right now, they are furious.
12:52The only reason they had stuck to the petrodollar deal in the first place is because the US offered
12:57them something just as valuable in return, military protection. And if it wasn't already obvious,
13:03the US isn't holding up their side of the deal. For starters, none of the Gulf states wanted the war
13:08with Iran in the first place. Just days before it began, they were flying officials to Washington
13:12in a last-ditch attempt to prevent it, something that was clearly ignored. And since the war started,
13:18that treatment has only gotten worse. After the bombing began, reports emerged that Qatar's stockpile
13:23of Patriot interceptor missiles could last as little as four days, yet America refused to help
13:29restock them. And this also isn't the first time Washington has left its Gulf partners out to dry.
13:34In 2019, Iranian drones struck Saudi Arabia's oil facilities, temporarily knocking out about 5% of
13:41the world's oil supply. But despite Saudi requests, America didn't do anything. Now, if this were any
13:47other country, then the Gulf states would have likely abandoned their side of the deal long ago.
13:52But doing that with the United States is far more difficult. Right now, global oil markets are
13:57entirely built around dollars, and that's the way they've been for nearly half a century. So if a
14:02Gulf state tomorrow announced it was switching to a different currency, buyers around the world would
14:07face real costs adapting to that change. That would then force sellers to accept slightly lower prices
14:13to compensate buyers for that very inconvenience. So even if a lot of individual countries are fed up
14:19with the US, nobody wants to be the first one to make the move. That is, as long as there
14:23isn't a
14:24very solid alternative. At the end of the day, the Gulf states don't just need a currency, they need a
14:29guarantor. Somebody who can protect their assets in one of the most dangerous and unstable regions in
14:35the entire world. For half a century, it was America who was able to do that. But today, that isn't
14:41really
14:41the case. Over the last two decades, China's share of world trade has increased by around seven times,
14:47and today they make up about 14% of all the goods exported each year. Add to that the fact
14:52that
14:52their military and navy are now the largest in the world by personnel, it's not super surprising that
14:57the Gulf states have quietly started to pivot. China is already Saudi Arabia's largest trading partner,
15:03and the two countries have signed a currency swap agreement that allows trade to be settled
15:07between them in yuan and rials, cutting the dollar out entirely. And unlike America,
15:13China doesn't lecture them about human rights, doesn't drag them into a war on their doorstep,
15:17and is willing to sell them advanced military technology without conditions attached.
15:22Again, none of this is going to break the system on its own, but each one chips away at the
15:26assumption
15:26that dollars are the only game in town. Going back to the original petrodollar deal that was struck in
15:31the 70s, the arrangement was just that Saudi Arabia would price its oil exclusively in dollars,
15:37and in return, the United States would provide security guarantees and military support.
15:41But given that, there was obviously a pretty big question as to what the Gulf states would do with
15:45all the dollars they'd acquired from selling oil. At the time, nobody really knew what this was,
15:50and it wasn't until 2016 that this was finally revealed. The secret? It was invested straight back
15:56into U.S. financial assets, meaning money from around the world that was being used to buy oil
16:01ended up flowing straight back into the United States economy, and the scale of this recycling
16:06was enormous. By 1977, Saudi Arabia alone held 20% of all U.S. debt owned by foreign governments.
16:14When the figures were finally disclosed in 2016, official Saudi holdings stood at around $117 billion,
16:21and for the U.S., that money is essential. When Washington spends more than it earns,
16:25which it has done for almost every year in decades, it issues treasury bonds. Essentially,
16:31IOUs that investors buy today with a promise to be repaid later with interest. The more investors
16:36willing to buy that debt, the lower the interest rate Washington has to offer, and the fewer buyers,
16:41the higher that rate has to go to attract them. Effectively, the more people willing to lend to the
16:46U.S. government, the cheaper it is for them to borrow money. And after literally decades of doing
16:50this, the U.S. has ended up with an insane amount of debt, now worth nearly $39 trillion.
16:57Servicing that debt already costs the government well over a trillion dollars a year in interest
17:01payments, making it the largest single line item in the entire federal budget. To put that into
17:06perspective, it works out to roughly $3,000 per American every single year. And if demand for U.S.
17:12savings were to dry up, say because the U.S. was to alienate one of its key buyers,
17:16that number climbs very quickly. Just a two percentage point rise in the interest rate
17:21would cost roughly $700 billion a year. That would force Washington into an impossible choice,
17:27either cut enormous parts of the federal budget, raise taxes dramatically, or borrow even more
17:32money just to pay the interest on the money it has already borrowed. And this is really the root of
17:36why the Gulf states hold so much power over the U.S., at least in the short term. What happens
17:42next
17:42will probably not be dramatic or immediate. The global financial system is far too large
17:46and far too deeply embedded to suddenly collapse because of a single conflict.
17:51But systems like the one built around the petrodollar rarely end in a single moment.
17:55More often, they begin to erode slowly as countries gradually start hedging their bets.
18:00And in fact, that process has already started. Saudi Arabia's public investment fund has been
18:05shifting billions into Asian markets. Gulf sovereign wealth funds, which collectively manage over
18:10$3 trillion, have been quietly diversifying away from U.S. assets. And Saudi Arabia is deepening
18:16its defense relationship with China. None of this makes headlines in the way an oil embargo would.
18:21But this is what the slow bleed actually looks like. Not a dramatic break, but a gradual rebalancing.
18:27In a strange way, Trump's promise to put America first might actually end up doing the opposite.
18:32The reality is that every country, no matter how strong, is in some way reliant on its allies.
18:37In the short term, it might make sense to ignore them, relentlessly pursuing your own objectives.
18:42But isolating your allies in this way inevitably comes with a cost. And in the case of the U.S.,
18:47that might mean the end of the dollar system as we know it.
18:51Now, with Trump's announcement that the military budget of the United States will actually be
18:55$1.5 trillion next year, the largest in its history, and with President Trump announcing
19:01electricity demand needs to triple, at the very least by 2030 to meet AI build-up, billionaire
19:07Robert Friedland has said that the world is sleeping into a copper crisis, and that if
19:11somebody's pointing a gun at you, you need that copper to shoot back.
19:14Copper demand is beyond belief. Supply is vanishing, and a copper shortage is just a matter of time now.
19:21President Trump has taken massive action to bring back copper production to U.S. soil,
19:25including an executive order and enacting a 50% tariff on imports. In fact, Stanley Druckenmiller,
19:31who many consider to be one of the all-time greatest macro investors, a self-made billionaire
19:37with a track record of never having a losing year, is very bullish on copper.
19:41Look at the global production outlook. Right when demand is projected to soar by 50% by 2040,
19:47the United States of America and China are battling over mineral supply chains and technological
19:52supremacy, because globalisation stepped out of equilibrium, and you can see just how,
19:57when looking at how the strategy of both superpowers is shaping up.
20:01Today I want to showcase a company that is actually trading near its all-time lows right now,
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