The Economist Who Predicted $110 Oil in 2023 Now Says the Dollar Has Five Years Left as Reserve Currency

Two Harvard economists met with the editors of The Economist in one of those wood-paneled side rooms in Davos last January to discuss a topic that most financial institutions still consider somewhat rude to bring up in public: is the dollar’s long reign as the world’s reserve currency coming to an end? Gita Gopinath, the previous head of the IMF’s top economic position, and Kenneth Rogoff, who served as the organization’s chief economist for two years and recently wrote a book titled “Our Dollar, Your Problem,” were not hedging. The directness of the conversation indicated that neither of them was treating this as a theoretical exercise anymore.

Rogoff has some credibility because of his history of making difficult predictions. The claim that geopolitical disruption to Gulf energy flows could push crude toward $110 was viewed as alarmist in many quarters when oil was trading close to $80 per barrel in the years prior to the Iran conflict escalating and most forecasters were anchoring to mild recovery scenarios. It wasn’t. In what the IBD called a nearly 12% single-week surge, oil broke through $100 and continued to rise, reaching about $111.54 per barrel in the week ending April 5, 2026. This surge was almost entirely caused by the disruption in the Strait of Hormuz. There’s a good reason to pay attention when someone who anticipated that begins discussing the dollar.

Harvard University Economists  ·  Former IMF Senior Officials  ·  Davos 2026

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The situation of the dollar is actually more complicated than its apparent stability would indicate. At the height of American economic dominance, the dollar’s share of global reserves was close to 90%; today, it is less than 60%. This change occurred gradually at first, then all at once, as these things usually do. The dollar dropped roughly 10% against a basket of rich-world currencies in the first half of 2025, which would normally be good news for developing countries with debt denominated in dollars. Rather, the majority of finance ministers in emerging markets responded with something more akin to fear. The dollar was declining because trust in American institutional stability had started to erode, which is a completely different kind of weakness that doesn’t go away when the economic cycle turns, rather than because American growth was booming and the world was embracing risk.

Gopinath has been equally astute. Speaking in late March 2026, she warned that markets were undervaluing oil risks and that there would be “major” repercussions if crude averaged $100 or more for the rest of the year. That qualification is not insignificant. The cost of food, manufacturing inputs, transportation, and ultimately the inflation figures that the Federal Reserve monitors are all impacted by energy prices at those levels. These inflation figures have already led Citigroup to postpone its first cut estimate until September and Wells Fargo to abandon its forecast for any rate cuts in 2026. The US fiscal position, which is already carrying debt levels that cause serious economists to pause, is under constant pressure due to higher-for-longer rates and an energy shock that shows no signs of fully resolving.

In the end, this might all be manageable. The Nixon shock in 1971, the Plaza Accord in 1985, and the post-2008 period when the renminbi’s internationalization was supposed to reorganize global trade finance are just a few of the existential challenges the dollar has faced. Despite these setbacks, the dollar has emerged from each of them as the preferred currency for oil contracts, sovereign reserves, and cross-border transactions. There is a strong case to be made that there isn’t a viable substitute because the yuan is still strictly regulated and not entirely convertible, gold doesn’t have the infrastructure necessary for contemporary settlement, and stablecoins, despite their expansion, only function on a small scale compared to what is required to manage international trade flows. Both Gopinath and Rogoff recognize this. They’re not asking whether the dollar will decline tomorrow. It’s whether the structural prerequisites for a shift that might occur more quickly than most people anticipate are now in place.

The current situation differs from earlier dollar scares due to a number of factors coming together at the same time. The war in Iran has unsettlingly shown how quickly a regional military conflict can cut off global energy supplies and cause the kind of economic shock that used to require a significant recession. These aren’t hypothetical risks from a think-tank paper: Saudi Arabia suspending operations at Ras Tanura following a drone strike, Qatar stopping LNG production, and the Strait of Hormuz narrowing to a trickle of daily traffic. These events are taking place in the context of growing US debt, deteriorating alliances, weaponized dollar sanctions that have forced even friendly countries to covertly diversify reserves, and a Chinese economy that is actively looking to settle more oil trade in yuan.

As all of this builds up, it seems that those who are most invested in the current system are the ones who are most likely to ignore the dollar reserve issue. The bond market, which has historically been a reliable indicator of institutional stress, has been sending its own subliminal messages. Treasury yields are rising, but not in the positive sense of an expanding economy, but rather in the way of a lender reevaluating terms out of concern for creditors. Robert Kiyosaki, who has been warning for twenty years that the dollar is dying and has generally been incorrect, at least in terms of timing, now finds himself in the unusual company of former IMF officials who are using better data to support structurally similar claims. The distinction is that Gopinath and Rogoff do not claim that the dollar is dying. They claim that five years is a shorter runway than most people realize and that the clock on its unchallenged supremacy is ticking.