How the Iran War Could Turn The Strait of Hormuz Into a Dollar Risk

Bridgewater Associates founder Ray Dalio has cautioned that if the US fails to secure the Strait of Hormuz from Iranian control, it could severely undermine the US dollar's global reserve currency status, drawing parallels to the Suez Canal Crisis's impact on Britain. Dalio suggests that Iran retaining the ability to threaten the strait would signal a US loss, eroding global confidence in American power. Balaji Srinivasan further noted that an Iranian success could signal the end of the petrodollar era, the unipolar moment, and the postwar order. The Strait of Hormuz is vital, handling about 20% of globally traded petroleum, and Iran has reportedly proposed allowing limited traffic only if settled in Chinese yuan, directly challenging the dollar's dominance in energy trade. This geopolitical tension is also compounding existing economic fragility, with economists warning that surging oil prices due to the conflict increase the risk of a US recession.

(Source：BeInCrypto)