I don’t think it is an exaggeration to say that two of the most distinctive characteristics of the modern way of life are the use of oil and the nature of the financial system, and that both are interlinked. Whoever exerts control over them exerts control over the trajectory of the world.
A primary source of energy and the mechanics of an economy imprint a particular form on social life, which then translates to how individuals live. In our age, we have two modalities that were never utilized—at least not at this scale and with this centrality—ever before.
The oil industry’s roots date back to the beginning of the eighteenth century but really took hold with the establishment of the first oil refineries in the mid-nineteenth century. This was crucial to unleashing the Second Industrial Revolution. Two nations emerged as the dominant players, producing almost all the oil at the time: the U.S. and Russia. This helps explain why they surpassed others a century later.
It is arguable that modern transportation would not have been possible without oil. How do you fly a plane without it? Furthermore, the speed of transportation changed the nature of our relationship to the world and to each other. But as oil became a dominant source of energy, displacing others, many more uses were found for it and its derivatives. Today, they are present in almost every critical component of our civilization, from plastic and asphalt to chicken feed and chemicals.
There are other forms of energy and other methods for producing many of the components that use oil derivatives, but they have not yet been exploited on a similar scale. And because the infrastructure of our modern life was built on oil, reliable alternatives are not yet available at the same magnitude.
Despite recent attempts to move away from oil, the closing of the Strait of Hormuz demonstrates that oil remains an irreplaceable part of our modern civilization—one which will not change without major upheavals—and a crucial part of the current financial system.
There have been other times in history when some kind of fiat currency was in use. China had various forms of it alongside other commodity-backed currencies since at least the 7th century. However, the current financial system, based on a unit of account that has no intrinsic value or commodity backing, is unprecedented.
The rapid expansion of the current financial system—not its origin or development—can be pinpointed to the end of the exchangeability of paper currency for gold by President Nixon in 1971.
In raw U.S. money-supply terms, M2 was about $685.5 billion in August 1971 and reached about $22.7 trillion by March 2026. U.S. federal debt was about $398 billion in 1971 and stood at about $39.0 trillion in March 2026, nearly a 98-fold increase. As a share of GDP, federal debt was around 35.0% in mid-1971 and reached about 122.5% by Q4 2025.
Similarly, since the “Nixon Shock,” the world has seen a major expansion in broad money relative to GDP, a rise in global public debt from roughly 30% of GDP to above 90%, and a rise in total global debt to above 235% of world GDP.
This exponential explosion of money supply and debt was possible because of a financial system based on banking, stock exchanges, large investment funds, and other tools that developed the highly complex and interdependent present economic system. It could be argued that this was the logical conclusion of the economic trajectory initiated a couple of centuries back.
It would not have been possible without the development of other technologies, such as communication and electricity, and their convergence in the internet and portable computer devices. However, I would argue that those two, along with their development and impact, are secondary to oil and the financial system.
Not coincidentally, in 1973/74, the U.S. “convinced” Saudi Arabia to only accept dollars for its oil, which solidified a direct link between the main source of energy and the core of the Western financial system. This relationship became reciprocal. Oil was traded in the futures market of the financial system while that trading happened in U.S. dollars. As the world became more dependent on oil and its derivatives, it also became more dependent on the U.S. financial system.
For the last 50 years, the U.S. has controlled both. This does not mean it controlled all the oil or that there were no other financial centers, but the U.S. could exert significant power over them in order to shape their direction and reap their benefits. The war on Iran could be the moment when that ends.
This is not the moment at which the U.S. ceases to be a global power. Arguably, the U.S. will always be a powerful nation exerting influence over parts of the world—unless, that is, it ceases to be a nation as we now know it. The latter does not seem plausible, at least in the short term. But this could very well be the turning point after which the U.S. can no longer exert unilateral influence over the economy and oil.
The Strait of Hormuz might be the catalyst. Iran has demonstrated that you don’t need to control all the oil, or even most of it, but just enough to significantly upset global supply. And the U.S. does not seem to have the power to oppose it. Iran is also enshrining in its law the right to charge a toll in Iranian rials for crossing the strait and has stated that it would let tankers pass if they paid for oil in yuan.
Neither of these measures, in and of themselves, is sufficient to definitively alter the direction of the financial and energy markets. However, the fact that they can be contemplated, proposed, and most probably implemented is what is significant. If it happens, then the U.S. can’t dictate the terms anymore because it can’t force competitors that defy it to submit to its demands.
The cultural consequences of this shift are underestimated. I started this article by stating that oil and the nature of the financial system are perhaps two of the most fundamental defining characteristics of the modern way of life. For the best part of the last 100 years, the U.S. has exerted influence or control over them.
This influence has meant that the U.S.-led Western world experienced rapid modernization and growth, and consequently, has been seen by many other nations as the developmental model to follow, either willingly or unwillingly. This, in turn, created the perception that Western values and culture were superior to others. This was not without opposition and conflict, but the wars that the West waged—especially the U.S.—to affirm control of energy and the financial system were cloaked in claims of the superiority of Western values.
That is no longer the case. The U.S. under Trump has only made a very timid effort to justify its military adventures in the language of democracy promotion or freedom. And when it did so, it was both reluctant and contradictory. It has, however, clearly stated its goal to control oil, both in Venezuela and Iran. The Russian Foreign Minister ratified this by saying that the U.S. was after “energy dominance.”
This indicates that the core of U.S.-led Western dominance was not a superior form of culture, as many try to assert today, but rather control over the energy and finances that underpin that culture. Losing control over them will also mean that Western culture will lose its perceived superior standing. The recent emphasis on preserving this Western cultural model against other cultures is a consequence of that.
The Trump administration has made upholding a particular framing of Western cultural understanding part of its narrative. Losing control over oil dominance and weakening the financial system would undermine that narrative. This makes this war not only about controlling energy and finance, but about dictating cultural norms.
I am not arguing that the U.S. has initiated this war for the sake of cultural dominance, but that a consequence of losing it would be the end of that dominance. Neither am I arguing that the Trump administration is necessarily aware of or cares about this shift, but rather that it could be a result of this war.
It could also be argued that the reason why the U.S. and Israel have started this war is because both need a “forever war” in West Asia: the U.S. in order to maintain the military-industrial complex (now expanded to include technology companies), which is a pillar of its financial system; Israel because it requires constant chaos in the region to continue its expansionist project.
These objectives are not contradictory to what has been explained above, rather are directly linked to it. If the U.S. loses unilateral influence over oil, it will weaken its financial system. A weakened financial system would also mean less perceived Western cultural superiority. This would lead to the questioning of Western values and a loss of moral standing. In turn, this could lead to Israel losing its moral narrative—which, despite the fact that it has obliterated it in Gaza, it still claims—and losing its main financial and military backing. No wonder, then, that Israel considers this war existential.
However, the cultural change that will begin to form if, at the end of this war, the U.S. has lost its ability to unilaterally dictate terms in the oil market and the financial system, will not be a radical cultural transformation. Every nation that stands to gain from it shares a fundamental similarity to the Western power structure, although with some significant differences.
Take China, Russia, or India, for example. Although each has a distinctive cultural heritage, they all share a similar power structure. Central power is vested in the state. Their financial systems are based on fiat currency and banks. They depend on similar energy sources, mainly oil. Their respective cultural heritages will shape political discourse and public and private norms. This discourse will become more prevalent and more widely accepted. But the essence of power in the hands of an elite will remain.
