The Strait of Hormuz as a Mirror of Global Transition
There is one habit in reading geopolitical crises that often deceives us: we tend to view each conflict as a standalone event. A war emerges in one region. Tensions rise elsewhere. Rivalries amongst major nations intensify. Then it all appears as a series of disconnected occurrences. However, some global observers perceive it differently. One such observer is Ray Dalio.
Dalio is neither a diplomat nor a military analyst. He is known as an investor and founder of Bridgewater Associates, one of the world’s largest investment management firms. Yet over the past decade and more, he has devoted considerable attention to the history of global power—attempting to understand how great nations rise, reach their peak, and are gradually replaced by new powers.
What is compelling about Dalio’s approach is the way he reads history as repeating patterns. In his research on great powers—from the Netherlands in the 17th century, Britain in the 19th century, to the United States in the 20th century—Dalio discovered that each global order typically passes through nearly similar cycles.
A nation or empire rises through a combination of innovation, trade, and economic strength. During this phase, the nation builds a global trading network, dominates important world economic routes, and creates an internationally trusted currency. At its peak, such power often appears virtually unshakeable. Yet history shows that it is precisely at this point where seeds of change begin to emerge.
National debt increases. Domestic social inequality widens. Meanwhile, new powers outside slowly grow and begin to challenge the old dominance.
Dalio frequently identifies three main signs that a global order is entering a phase of change: extremely high debt, escalating internal political conflict, and the emergence of powerful geopolitical competitors.
If we observe the world today, it is difficult to ignore that all three symptoms are present simultaneously. Global debt is at very high levels. Political polarisation in many countries has increased sharply. And competition amongst major powers—particularly between the United States and China—is increasingly felt across various domains. From trade to technology, from maritime routes to cyberspace.
It is within this context that the Strait of Hormuz becomes far more important than merely an oil shipping lane. The strait is one of the points where global economics and geopolitical power meet directly.
Nearly one-fifth of the world’s oil passes through this narrow waterway every day. Gulf nations export their energy through the strait. Industrial nations in Asia depend on supplies transiting there.
For several decades, the stability of this route has been part of a global security system led by the United States. Yet when we observe the tensions emerging in the region today—threats to tanker vessels, military manoeuvres, and diplomatic rivalries—we begin to see that this stability is no longer entirely taken for granted.
This is where Dalio’s framework becomes relevant. During periods when the global order begins to shift, strategic points such as energy trade routes often become arenas where old and new powers test their influence against each other.
The Strait of Hormuz is one such point.
For China, the stability of this route is directly linked to the energy security that sustains its economy. For Russia, the Middle East region is part of the broader Eurasian geopolitical balance. For the United States itself, maintaining freedom of navigation through this route is part of the global system it has built since the end of the Second World War.
When various major interests converge in such a confined space, tension is almost inevitable. Yet major changes in history rarely occur through a single dramatic event. They usually emerge through a series of crises that appear separate but are actually interconnected.
Disruptions to energy routes. Economic competition amongst nations. Regional conflicts that gradually draw the attention of major powers. All of these can be signs that the world is moving towards a new phase in its historical cycle.
The Strait of Hormuz, in many ways, is merely one small point on the world map. Yet as history often shows, such small points are sometimes those that reveal the direction of much larger change.
Through this narrow waterway, tanker vessels carry energy for the global economy. But alongside them moves something more difficult to perceive yet equally important: a slow shift in the balance of global power.