From the US dollar tide to energy wars: the iteration and failure of America's global harvesting logic

(Source: Steel vs. Observation)

In recent weeks, the sharp fluctuations in international crude oil prices have become the focus of global markets. And behind this round of oil-price abnormality is precisely the most core mainline shaping the current global landscape: the contest between stability and chaos.

Emerging market countries represented by China have one central priority: “stability.” Only when global trade and economic order remains steady, and industrial chains and supply chains stay open and unblocked, can everyone安心(安心) focus on real-world industries and achieve sustainable development.

Meanwhile, as the United States, the global incumbent hegemony power, is more inclined to look for opportunities amid “chaos.” Only when markets are volatile, geopolitics changes, and the global order is restructured can the U.S. use its dollar hegemony and military advantages to fish in troubled waters and profit from it.

I. Oil prices surge: the most straightforward game between stability and chaos

Since late February 2026, when Middle East geopolitical conflict escalated, risk premiums in the global oil market have risen rapidly. Brent crude climbed from around $70 per barrel before the conflict to $109.74 per barrel in early April. In just a little over a month, the increase exceeded 56%, marking the fastest monthly rally since the 1980s and coming close to the historical highs seen during the Russia-Ukraine conflict in 2022.

Such violent price swings are still manageable for major countries with diversified energy supply chains and strong resilience. But for Southeast Asian emerging economies that are highly dependent on energy imports, it means a severe challenge to survival.

Data from the ASEAN Centre for Energy shows that more than half of ASEAN countries’ crude oil imports come from the Middle East. Among them, the Middle East crude oil dependency of the Philippines is as high as 96%-98%, Vietnam’s is 80%-87%, and Thailand’s is also between 56%-74%.

What is even more alarming is that these countries have almost negligible buffers for energy security. Vietnam’s strategic petroleum reserves can support only about 20 days, Indonesia about 23 days, and the Philippines’ fuel stocks are sufficient for just 38 days—far below the 90-day safety line recommended by the International Energy Agency.

The shock brought by the surge in oil prices has already formed a chain reaction along the industrial chain.

According to data released by Vietnam’s Ministry of Trade on March 25, after the conflict broke out, Vietnam’s domestic diesel prices jumped by about 105%, while gasoline rose by nearly 68%. The Ministry of Finance was forced to urgently announce that it would cut import tariffs on gasoline and diesel to 0% to relieve pressure.

The bank’s bank model from overseas Chinese (Overseas Chinese Bank) more directly quantifies the impact: for every $10 per barrel increase in international oil prices, Thailand’s current account balance as a share of GDP would fall by 0.5 percentage points, and the Philippines would fall by 0.4 percentage points. A report by Malaya Investment Bank also plainly stated that the Middle East situation is bringing an “stagflation-type shock” to ASEAN economies. It has reduced its 2026 growth forecasts for ASEAN’s six major economies from 4.8% to 4.5%, and raised inflation forecasts from 2.2% to 2.7%.

Even more severe is that this crisis has long gone beyond the energy sector. About 67% of Thailand’s nitrogen fertilizer and 74% of its urea imports come from Gulf countries. As energy prices surge, agricultural production costs are being pushed up rapidly, which then filters through to food prices—putting these countries into a vicious cycle of “energy inflation—food inflation—broad-based inflation.”

For these small countries that already have weak foreign-exchange reserves, low value-added in their industrial chains, and have long been running trade deficits, energy prices getting out of control could very well slide them step by step into the abyss of national bankruptcy—this, precisely, is the global “harvesting” script the United States has relied on for decades with repeated success.

II. The dollar tide that has run wild for half a century—how exactly does it harvest?

Over the past several decades, the U.S.’ most handy global wealth-harvesting tool has been the “dollar tide.” Leveraging the dollar’s global monopoly position, this playbook typically completes a round of wealth harvesting from emerging markets every 5-7 years. The logic is not complicated and mainly consists of three clear steps.

Step 1: Easing monetary policy and fattening the fish

When the Federal Reserve begins a rate-cutting cycle, massive amounts of low-cost dollars flow into global markets, especially high-growth emerging economies. These hot money flows push up local stock markets, real estate prices, and other asset prices, creating a false bubble of economic prosperity—while also saddling the target countries with heavy dollar external debt.

Back in the 1970s, the Fed’s long-term low-interest-rate policy flooded Latin America with large amounts of dollars. Mexico’s total debt jumped from $5 billion in the early 1970s to $87.6 billion before the 1982 crisis broke out. Around the same period, external debt sizes for Argentina and Brazil also exceeded $50 billion collectively, increasing by more than 7 times compared with the early 1970s. In the early 1990s, the easing cycle brought dollar hot money sweeping through Southeast Asia, laying the fatal groundwork for the subsequent Asian financial crisis.

Step 2: Raising rates and drawing the money out

When the asset bubble is blown up to its peak, the Fed flips its stance and raises interest rates aggressively and shrinks its balance sheet. The yields on dollar assets surge sharply, driving dollar capital worldwide to疯狂 (疯狂) dump emerging market assets and quickly return to the United States.

This “bleeding” directly causes emerging markets’ currency exchange rates to collapse, foreign-exchange reserves to run out, and asset prices to fall off a cliff. Businesses go bankrupt at large scale, and in some cases there are even sovereign debt defaults.

From 1979 to 1981, in response to domestic inflation, the Fed violently raised the benchmark interest rate to a record 20%, directly triggering Latin America’s debt crisis. In August 1982, Mexico was the first to announce it could not repay $80 billion in due external debt. Then 16 Latin American countries—including Brazil and Argentina—followed with defaults. The total size of defaulted external debt exceeded $315 billion, and the Mexican peso depreciated more than 200% within one year.

In 1994-1995, the Fed raised rates seven times in a row, directly igniting the 1997 Asian financial crisis: the Thai baht plunged by 50% within a year, and currencies and stock markets across multiple countries in Southeast Asia collapsed collectively. In 2022, when the Fed raised rates aggressively by 500 basis points within a single year, it directly led to Sri Lanka’s foreign-exchange reserves running out, prompting the country to declare bankruptcy. Around the same time, the currencies of 36 countries worldwide depreciated by more than 20% against the U.S. dollar, and nearly one-third of emerging market countries fell into debt troubles.

Step 3: Snapping up the bottom at low prices

When the target country’s economy is nearing collapse, the U.S. will coordinate with the IMF, using the name “emergency rescue,” to impose harsh conditions requiring forced opening of capital markets and pushing state-owned enterprise privatization. Then Wall Street capital takes the returned dollars and, at “bargain prices,” acquires core high-quality assets such as local banks, energy, and manufacturing—completing a full cycle of wealth harvesting.

After the Latin American debt crisis, U.S. capital gained control of the energy and telecommunications lifelines in multiple countries, and Latin America has since been stuck in “the lost decade.” After the Asian financial crisis, foreign investors’ equity stake in South Korea’s Samsung once exceeded 53%, and core financial and energy assets across Southeast Asia were heavily carved up. According to estimates by the Bank for International Settlements, between 2008 and 2018, U.S. multinational companies captured more than $2 trillion in profit worldwide only through arbitrage operations based on the dollar tide.

III. The rise of the renminbi breaks the underlying foundation of dollar harvesting

But now, this long-running harvesting playbook that has dominated for more than half a century has nearly stopped working. The core reason is the steady rise of the renminbi, which has completely broken the dollar’s unilateral monopoly structure.

Data released by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) shows that in January 2026, the renminbi’s share of global payments surged to 3.13%, ranking it fifth globally. If you add China’s independently built cross-border payment system CIPS, the renminbi’s actual share of global payments is about 7%, making it the world’s third-largest payment currency.

As of the end of 2025, the CIPS system had 193 direct participants and 1,573 indirect participants, covering 124 countries and regions worldwide. In full-year 2025, it processed amounts totaling 18.02 trillion RMB. Compared with SWIFT, its settlement cost is lower by about 80%. Meanwhile, the cross-border payment project mBridge jointly built by China with the Hong Kong Monetary Authority, Thailand, the UAE, and others has also been launched. It achieves point-to-point, second-level settlement through blockchain technology, completely bypassing SWIFT’s monitoring and constraints.

As the payment system improves, the renminbi’s penetration into the real economy has also achieved breakthrough growth. In 2026, the renminbi settlement share in China-Russia trade reached 46%, and the renminbi settlement share in energy trade exceeded 90%. Saudi Arabia’s renminbi settlement share for crude oil to China reached 25%, and Iran’s renminbi share for oil exports to China reached 45%. At present, the renminbi has become China’s largest settlement currency for external receipts and payments and the world’s second-largest trade financing currency. Its share in global foreign-exchange reserves has risen to 3.2%, remaining firmly in fifth place globally.

The steady rise of the renminbi has turned “de-dollarization” from a slogan into global consensus and actual action. In trade and foreign-exchange reserves, countries finally have a reliable alternative option: a currency value that is stable and anchored to China’s strong real-economy base. They are no longer bound unilaterally to the dollar.

When emerging economies can avoid exchange-rate risks through renminbi settlement and resolve dollar liquidity crises through currency swaps, the “global currency monopoly” foundation that allows the dollar tide to function is completely broken. Since 2026, official agencies around the world have reduced their holdings of U.S. Treasury securities for five consecutive weeks, with a cumulative reduction of more than $20k. The dollar’s share in global foreign-exchange reserves has also fallen—from 73% in 2000 to below 58% today—while the moat of U.S. dollar hegemony is steadily eroding.

IV. When old practices fail, the U.S. switches to a new energy-harvesting play

When the old methods stop working, the U.S. quickly switches to a new harvesting playbook. The core is manipulating global energy prices and completing a new round of plunder by manufacturing an energy crisis.

The underlying logic of this new play is the U.S.’s complete identity shift. Today, the U.S. is no longer the energy-importing country of old, but the world’s top-tier energy export giant.

According to data from the U.S. Energy Information Administration (EIA), in 2025 the average daily U.S. crude oil production was 13.6 million barrels, staying firmly first globally. The average daily total oil exports were 10.67 million barrels, maintaining the position as the world’s largest oil exporter for six consecutive years. Its annual liquefied natural gas (LNG) export capacity accounts for nearly one-quarter of global trade volume. In 2025, the U.S. provided 56% of the EU’s LNG imports.

This identity shift changes the U.S. from being the party harmed by higher oil prices into the biggest beneficiary. By pushing up oil prices, the U.S. can achieve three layers of harvesting goals:

First, directly make U.S. energy companies profit handsomely. In 2025, the global energy major Exxon Mobil posted full-year net profits of $28.8 billion, reaching the highest production level in more than 40 years. During the March 2026 oil-price surge, just the premium income generated by higher oil prices for the U.S. added more than $60 million per day—both filling the fiscal deficit and delivering huge gains to the defense-industrial-energy complex behind it.

Second, replicate the dollar tide harvesting loop through an energy crisis. A surge in oil prices pushes up global imported inflation. Energy-importing countries, to offset inflation and stabilize their domestic currency exchange rates, are forced to follow the Federal Reserve in raising interest rates. This then punctures domestic asset bubbles, triggers economic downturns and debt defaults—and the U.S. then takes the opportunity to snap up core assets from countries at low prices. During the Russia-Ukraine conflict in 2022, the U.S. sold LNG to Europe at 4 times the price compared with the domestic price and also rolled out the “Inflation Reduction Act” to attract European high-end manufacturing to move to the U.S., completing a precise harvest of its allies.

Third, strengthen control over allies and precisely target competitors. The primary targets of this harvest are Southeast Asian emerging economies that lack domestic energy production capacity and are highly dependent on imports. Higher energy prices rapidly exhaust their foreign-exchange reserves, forcing them to hand over the sovereignty of core assets. Even European countries with a relatively developed industrial system but severely insufficient energy self-sufficiency have long been tightly held by the U.S. in terms of their energy lifelines and could become sacrifices at any time.

V. The contest between two models—the endgame is already decided

This contest between stability and chaos, in essence, is a final contest between two development models.

China, represented by it, follows a path to national strength through real-economy development, mutual benefit and win-win outcomes, and peaceful development. It is committed to maintaining stability in global industrial chains and supply chains and providing precious certainty for the global economy.

Whereas the U.S., represented by it, follows a path of extracting wealth through hegemony monopoly, manufacturing turmoil, and financial harvesting. It always treats global turmoil as a tool to profit for itself.

The failure of the dollar tide has long proven that hegemony maintained by financial harvesting is not sustainable. And even this new energy-manipulation play is ultimately just quenching thirst by drinking poison.

In the end, global economic prosperity has never been sustained by harvesting and turmoil. Only stable order and cooperative win-win partnerships can bring the world real long-term development. As more and more countries see through the logic behind the turbulence and move toward de-dollarization and diversification, those models that profit by manufacturing disorder will inevitably end up in a dead end of history.