**Original Title:** It All Comes Down to Who Controls the Strait of Hormuz: The "Final Battle"
**Original Author:** Ray Dalio
**Original Translation:** Peggy, BlockBeats
**Editor's Note:** In most wars, disagreements and uncertainties are the norm. However, in this conflict surrounding Iran, the outcome criteria are exceptionally clear: whoever controls the Strait of Hormuz.
This is not just an energy transportation channel; it is the "valve" for global capital flows and geopolitical power structures. Once the right of passage is weaponized, its impact will quickly spill over to oil prices, inflation, financial markets, and the entire international order.
In this article, Ray Dalio makes a straightforward judgment: if Iran maintains control over the Strait of Hormuz (even if only as a bargaining chip), the outcome of this war will be perceived as a failure for the United States. And the significance of this failure goes far beyond the gains and losses of a single military operation.
Drawing on historical comparisons, the author points out that similar junctures often mark turning points in power structures. On this basis, he places the current Middle East situation within a broader "historical cycle" framework, arguing that the present conflict is merely part of the evolution of debt, politics, and geopolitical structures.
When the outcome of a war can be measured by whether a strait remains accessible, its significance transcends the Middle East, pointing to the next phase of the global order.
Below is the original text:
Comparing the current events with similar historical contexts and calibrating one’s thoughts based on the judgments of more informed and experienced decision-makers and experts has consistently helped me make better decisions.
I have found that such situations are usually accompanied by significant disagreements and surprises about the future direction. However, in this conflict, there is one judgment that is almost unanimous: everything boils down to one point—who controls the Strait of Hormuz.
From government officials, geopolitical experts, and observers from various regions worldwide, I have heard a consensus: if Iran continues to maintain control over the Strait of Hormuz or retains the ability to use it as a negotiating tool, then
From government officials, geopolitical experts, and people across the globe, I have heard the widespread opinion that if Iran continues to control the passage rights of the Strait of Hormuz or even retains it as leverage for negotiation, then:
The U.S. will lose, and Iran will win.
The U.S. will be seen as losing this war, and Iran will be regarded as the victor. The reason is simple: if Iran can weaponize the Strait of Hormuz, it means the U.S. is incapable of resolving this issue.
This strait is one of the most critical energy channels globally, and its passage should be guaranteed at all costs. If Iran blocks it, the damage goes beyond the U.S., affecting its Gulf allies, oil-dependent countries, the global economy, and the entire international order.
Judging by the outcome, the victory or defeat of this war can almost be measured by one metric: ensuring safe passage through Hormuz. If Trump and the U.S. cannot "win" this war, they will not only be viewed as losers but also as having created an unmanageable situation.
As for why they might lose, it’s not important. Whether it’s domestic anti-war sentiment affecting midterm elections, the unwillingness of American society to bear the costs of war, insufficient military capability, or the inability to rally allies to jointly keep the passage open—
None of these reasons matter. The outcome remains the same: the U.S. loses.
Historically, the significance of such failures can be profound. Losing control of Hormuz could be to the U.S. what the 1956 Suez Canal Crisis was to Britain (Britain was forced to concede over the canal, leading to a shift in global power), or what financial overextension and weakened naval dominance were to 17th-century Spain, or the loss of trade and financial supremacy to Britain in 18th-century Netherlands. These are all emblematic moments marking the decline of empires.
History repeatedly plays out similar scripts: a seemingly weaker nation challenges dominant power at a key trade route; the dominant power issues threats; the world watches the outcome; then, positions and capital are redistributed based on victory or defeat.
This "decisive battle," which determines the outcome, often rapidly reshapes history because both people and capital instinctively flow toward the victor. This shift reflects directly in markets—bonds, currencies, gold—and deeper geopolitical power structures.
Based on numerous historical examples, I have summarized a simple yet important principle: When a dominant nation with reserve currency status becomes fiscally overextended and simultaneously shows signs of weakness in military and financial terms, beware that allies and creditors may begin to lose confidence, debts get sold off, the currency weakens, and even the reserve currency status could be shaken.
If the U.S. and Trump fail to ensure the shipping flow through Hormuz, these risks will significantly escalate.
In the past, it was taken for granted that the U.S. could militarily and financially overpower its opponents. However, Vietnam, Afghanistan, Iraq, and now potentially this conflict, have a cumulative effect that is eroding this belief and undermining the post-war international order dominated by the U.S.
Conversely, the opposite is also true. When a dominant nation clearly demonstrates military and financial strength, confidence is bolstered. For example, Ronald Reagan quickly facilitated the release of hostages from Iran upon taking office and provided naval escorts for tankers during the Iran-Iraq war, all of which reinforced U.S. deterrence.
If Trump can fulfill his promises, ensure the free flow of Hormuz, and suppress Iranian threats, it will significantly enhance global confidence in U.S. strength.
On the other hand, if the Strait of Hormuz falls into Iran’s hands and is used as a tool for coercion, the world will become its "hostage." This implies not only the "hijacking" of the global energy lifeline but also that the U.S. "initiated a war but failed to win." Trump’s credibility will be directly affected, especially given his previous strong remarks.
Many foreign policymakers privately hold a straightforward view: "He speaks well, but at a critical moment, can he win?" Some observers even perceive this conflict as an "ultimate showdown," watching it as if it were a gladiatorial match or a championship final.
Trump is calling on other countries to join escort missions, and whether he can truly organize allies is itself a test of his ability. The reality is that relying solely on the U.S. and Israel makes it challenging to ensure the safety of the shipping lanes without weakening Iran's control, which is likely to require a truly large-scale conflict.
In contrast, Iran's stance sharply differs from that of the U.S. For them, this is a war about faith and survival. They are willing to bear greater costs, even sacrificing lives. Meanwhile, American society is more concerned about oil prices, and American politics is more focused on elections.
In war, the ability to "endure pain" is often more critical than the ability to "inflict pain."
Iran's strategy may very well be to drag it out, to prolong the war and deepen the pain until the U.S. loses patience and withdraws. Should this happen, America's allies will quickly realize that the U.S. will not always stand firmly behind them.
"Negotiated resolution" is merely a surface option.
While discussions about ending the war through an agreement exist, everyone knows that agreements cannot truly resolve the problem. Almost everyone understands that conflicts of this nature cannot be genuinely resolved through agreements. The true determinant of victory lies in the upcoming "critical battle."
Whether the result is Iran continuing to control the Strait of Hormuz or losing its control, the conflict will escalate to its most intense stage. This "final showdown" that determines the outcome is likely to be of an enormous scale.
The Iranian military has stated: "Any regional energy facilities associated with or cooperating with the U.S. will be completely destroyed." This is precisely the kind of action they might take. If the Trump administration successfully unites other nations to dispatch naval escorts and the shipping lanes remain unmined, this might provide a resolution. However, both sides understand that the key battle that will decide the outcome is still ahead. If the U.S. fails to reopen the strait, the consequences will be extremely severe; conversely, if Trump wins this battle and eliminates the Iranian threat, it will greatly enhance his prestige and demonstrate American strength.
The "decisive battle" will impact the entire world.
The direct and indirect effects of this "decisive battle" will ripple globally. It will affect trade flows, capital flows, and the geopolitical dynamics involving China, Russia, North Korea, Cuba, Ukraine, Europe, India, Japan, and others. More importantly, this conflict is not an isolated event but part of a larger "historical cycle." This cycle is driven by financial, political, and technological forces. The Middle East situation is just one facet of it.
For instance, whether a country can win a war depends on the number and intensity of its conflicts, its domestic political situation, and its relationships with like-minded countries (such as Iran, Russia, China, and North Korea). No country is capable of handling multiple wars simultaneously, and in a highly interconnected world, wars spread like pandemics, in unpredictable ways.
At the same time, domestically, especially in democratic countries with significant wealth and value-based divides, there will always be fierce debates about "whether to go to war and who should bear the costs (financial or life)." These complex chain reactions, although difficult to predict, usually result in unfavorable outcomes.
Finally, I want to emphasize that I am not speaking from a political stance but as someone who must make judgments about the future. By studying the past 500 years of empires rising and falling and the replacement of reserve currencies, I have concluded that five forces drive changes in the world order:
1) Long-term debt cycles
2) The rise and fall of political orders
3) Cycles in international geopolitical order
4) Technological advancements
5) Natural events
The current Middle East situation is just a segment of this "grand cycle." While we cannot precisely predict all details, the operational states of these forces can be observed and measured.
History does not necessarily repeat itself, but it often advances in similar rhythms. What truly matters is: you need to determine whether this "grand cycle" is occurring, which stage we are in, and how you should act within this context.