As war spreads across the Persian Gulf, the first tremors are felt in oil markets. The deeper shock may come later — in the foundations of the global financial system.
For nearly five decades, the international monetary order has rested upon a quiet but immensely powerful arrangement: the predominance of the United States dollar in global energy trade. The petrodollar system, forged in the geopolitical upheavals of the 1970s, helped transform American financial dominance into the central pillar of the modern world economy.
Yet prolonged conflict involving Iran could place unexpected strain on that system. Not because the dollar is about to collapse —…