The petrodollar faces increased risk, but a petroyuan is ‘far-fetched’ as fears of U.S. losing superpower status are overhyped, strategist says

President Donald Trump’s war on Iran has raised doubts about America’s superpower status and currency dominance as the Strait of Hormuz remains under Tehran’s control.

But Dan Alamariu, chief geopolitical strategist at Alpine Macro, isn’t buying predictions about a U.S. decline: “Don’t Believe The Hype (Yet).”

In a note on Friday, he acknowledged that if Iran’s regime is left standing while retaining some control over the strait, it would represent a “strategic setback” for the U.S. and humiliation for Trump.

“The bigger question is whether this marks the end of American superpower status, dollar dominance, and the petrodollar. More possible if Iran ends up with control of the SoH, but we would not bet on it,” Alamariu added.

He also shot down comparisons to the Suez Crisis in 1956, when the U.S. pressured Britain and France to abandon their attempt to regain control of the Suez Canal, signaling the end of their reign as great powers.

Alamariu pointed out that the two European countries had effectively lost their empires by then after being bankrupted by World War II. “The U.S. does not resemble that.”

In addition, the U.S. defeat in the Vietnam War also gave rise to declarations of American decline, but it was instead the Soviet Union that ended up collapsing, he noted.

“Similarly, the petrodollar faces some increased risk, but the GCC has more reason than ever to keep ties with Washington close, given ...