Decisive Battle in the Strait of Hormuz is about to erupt

How do differences in AI motivation affect the outcome of the Strait control dispute?

According to Reference News on March 21, the conflict between the United States, Israel, and Iran will revolve around a decisive confrontation over the Strait of Hormuz, and its outcome will determine whether the US-led global order can survive.

Bridgewater founder Ray Dalio issued a stark warning on March 16: the conflict among the US, Israel, and Iran will center on a decisive showdown over the Strait of Hormuz, and its consequences will extend far beyond oil prices. It will determine whether the US-led global order endures.

In a lengthy post on X, Dalio wrote, “Everything depends on who controls the Strait of Hormuz.” He believes that if Iran still has the ability to control the strait, or even to influence negotiations over who can pass through, then regardless of how the conflict is resolved, the US will be seen as having lost the war.

Dalio compared a potential US failure in the Strait of Hormuz to Britain’s experience during the Suez Crisis in 1956, a moment widely regarded by historians as marking the end of the British Empire’s global imperial dominance. He notes that over nearly 500 years, a recurring pattern exists: a rising power challenges the dominant empire over a critical trade route, and funds and alliances quickly shift to the victorious side.

The dominant power, often the issuer of the global reserve currency, may initially experience “fiscal overexpansion,” as Dalio often says, and then lose control in the conflict, “exposing its weaknesses.” He wrote, “At this point, beware of allies and creditors losing confidence, the reserve currency status being undermined, debt assets being sold off, and currency devaluation, especially relative to gold.”

Dalio believes both sides are caught in a conflict with no diplomatic solution. He states, “Although some talk about ending this war through agreements, everyone knows that any agreement is worthless because it cannot resolve the conflict.” He adds that whatever happens next—whether the US controls the strait or leaves it to Iran—“could be the worst phase of the conflict.”

The core issue, Dalio says, is asymmetric motivation. For Iran’s leadership, this war “is a matter of survival,” involving regime stability, national dignity, and religious faith. For Americans, it mainly concerns gasoline prices; for US politicians, it’s primarily about midterm elections. Regarding which side has the advantage in a long-term struggle, Dalio is clear: “In war, the ability to endure pain is even more important than the ability to inflict pain.”

He states Iran’s strategy is to impose as much pain as possible for as long as possible, then wait for the US to withdraw, similar to what the US has done in Vietnam, Afghanistan, and Iraq.

Trump is now calling for allies to join a multinational convoy through the strait, but most of these countries have not agreed yet. Dalio says whether this initiative can become a potential “solution” to reopen the passage remains to be seen.

He notes, “If President Trump demonstrates that he and the US have the strength to do what he has promised—namely, to secure free passage through the Strait of Hormuz and eliminate Iran’s threats to its neighbors—this would greatly boost confidence in him and US power.”

But if he fails, the chain reaction—affecting trade flows, capital markets, and the dollar’s reserve currency status—could cause irreparable damage to US hegemony.

This article was published by Fortune magazine’s website on March 17, titled “Ray Dalio Warns of an Imminent ‘Great Battle’ at the Strait of Hormuz—Failure Could End the American Empire.”

Source: Reference News

Original Title: “The ‘Brutal Great Battle’ at the Strait of Hormuz Is Coming”

Editor: Wang Yimeng

Chief Editor: Ma Xueling