11% share vanishes! U.S. economist: 'De-dollarization' is unfolding at an astonishing pace.

As for a world without the U.S. dollar—if the dollar were suddenly to vanish globally—the sole outcome would be a global financial crisis, with markets turning into a meat grinder that 'kills' assets. Therefore, de-dollarization should proceed slowly—ideally, as slowly as possible. I’ve seen various expressions of aversion online, but reason tells us that, for now, we still need the dollar and must continue buying U.S. Treasuries. When will the dollar truly bid us farewell? That requires comprehensive assessment. For example, during President Lula’s recent visit to China, he raised the topic of de-dollarization and proposed settling bilateral trade in local currencies. Yet implementation faces numerous practical hurdles. Take the petrodollar system: In 2022, Brazil ranked ninth among China’s crude oil suppliers, importing nearly 25 million tons. If settled in dollars, Brazil would need meticulous planning. Recently, Petrobras—the Brazilian state-owned oil company—explicitly stated that no discussion has taken place regarding replacing the dollar in its cooperation with China. It even consulted Brazil’s Ministry of Finance, which responded that moving away from the dollar is indeed the direction—but it must be carefully planned, including detailed negotiations with China. Why is Petrobras so nervous? Because it is listed in the U.S., and Wall Street played a significant role in its privatization. Although ultimate control rests with the Brazilian government, Petrobras remains the country’s primary source of wealth—generating billions of dollars annually in dividends for the government. Any financial maneuvering by the U.S. in capital markets would severely impact Petrobras. Thus, progress must be step-by-step. As long as we recognize that the dollar’s dominance has grown excessively oppressive, a crisis lies ahead—and even Treasury Secretary Janet Yellen has acknowledged this view in interviews.

[The oil cycle is far from over] Mountain (10,000-word analysis): Detailed breakdown of Oaktree’s Q1 2026 disclosed holdings; Marks’ cyclical positioning once again leads the market.

Its portfolio style is highly concentrated: the top two positions account for over 30% of total holdings, and the top ten exceed 60%. The portfolio focuses on value stocks and high-dividend equities, with virtually no exposure to mainstream large-cap technology stocks. This quarter, Oaktree initiated eight new positions—most notably Petrobras (PBR) and YPF (Argentina’s national oil company). PBR entered the top ten holdings at 3.12%, marking Howard Marks’ largest single-position investment in an emerging-market energy company in recent years. YPF accounts for 1.01%; a U.S. West Coast office REIT makes up 1.29%. Overall: 1. Energy sector weight: 35%, spanning tankers, shale oil, state-owned oil companies, and power generation. Oaktree reduced exposure to U.S. domestic shale oil while significantly increasing stakes in Latin American state-owned oil firms. 2. Mining & precious metals: 15%, focused on gold and industrial metals. The fund fully reduced positions this quarter, reflecting cautious sentiment toward near-term commodity price gains. 3. Telecom & communications: 10%, holding telecom operators across the U.S. and Latin America—valued for their stable cash flows and high-dividend defensive attributes. The energy sector has long been one of Oaktree’s most critical investment domains. Marks’ bullish outlook stems from his deep understanding of global energy supply-demand dynamics. Over the past decade, environmental policies and investor resistance to fossil fuels have led to severe underinvestment in global oil and gas exploration and development. Meanwhile, global energy demand continues rising. This imbalance between supply and demand will sustain elevated oil prices for an extended period. Yet this quarter, Oaktree executed major intra-sector reallocations: cutting U.S. domestic shale oil firm VNOM while aggressively adding positions in Petrobras (PBR) and Argentina’s YPF. Valuation comparison: 1. Oaktree substantially trimmed its stake in U.S. shale oil company Viper Energy (VNOM), reducing its weighting from 7.32% to 4.40%. Oaktree first bought VNOM in Q2 2023, when oil prices were low and market sentiment toward shale oil was broadly pessimistic. Over the subsequent two years, as oil prices rose and company performance improved, VNOM’s stock surged over 150%, with its dividend yield peaking at 18%. By Q1 2026, Marks judged VNOM’s valuation fully restored and its growth prospects beginning to plateau. VNOM is a solid company—but its stock price has already priced in all positives. High-quality acreage in the Permian Basin is largely developed; future production growth will be extremely limited. Moreover, U.S. shale operators’ costs are steadily rising, eroding profitability. VNOM’s dividend yield has also declined from its peak. While trimming U.S. domestic shale oil, Oaktree made sizable purchases of two Latin American state-owned oil companies. Petrobras—the largest integrated energy company in Latin America—holds vast deepwater pre-salt reserves off Brazil’s southeastern coast, exceeding 150 billion barrels of oil equivalent. In Q1 2026, its total operational output reached 4.65 million barrels of oil equivalent per day, with pre-salt output hitting 2.66 million barrels per day—both record highs for the company. Its all-in cost per barrel from pre-salt fields stands at just USD 23–35, far below the global average—ensuring profitability even if Brent crude falls to USD 50 per barrel.

Petrobras to Pay $1.85 Billion in Interest on Equity to Shareholders

May 11, 2026

Petrobras' board approved a $1.85 billion interest on equity payment to shareholders, scheduled for distribution in two installments during August and September.

reuters

2026-05-11

Petrobras to Pay $1.85 Billion in Interest on Equity to Shareholders

2026-07-07

Petrobras signs $58 million deal with Brazil regulator to bring wells into compliance

Petrobras to Pay $1.85 Billion in Interest on Equity to Shareholders

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