- Ray Dalio says control of the Strait of Hormuz could decide the outcome of U.S.–Iran tensions.
- He warns failure to secure it may signal a decline in U.S. global influence.
- Dalio highlights risks across military, political, and econom
The ongoing war between Washington and Tehran has been dependent on "who controls the Strait of Hormuz", which will decide who wins the war, according to Ray Dalio.
In a post on X, the billionaire investor characterised the 'final battle' as the unavoidable peak of escalating tensions. While targeting US President Donald Trump, he wrote, "If Donald Trump and the U.S. don't win this war, with victory being easily measured by whether they can ensure safe passage through the Strait of Hormuz, they will also be perceived to have caused a disastrous situation they could not fix."
Dalio has issued a warning to the US, suggesting that the nation is following a historically "predictable" path toward decline. Drawing from his extensive research into the rise and fall of world powers, he suggested that the pattern of imperial breakdown is almost always the same. This moment will decide whether the United States is seen as a resilient global leader or a power in clear decline. Dalio noted, "if the US doesn't win control of Hormuz, it will be judged to have lost."
As per Dalio's view, the Iranians are indulged in war for revenge and commitment, and life for them matters less.
Why Hormuz Matters to America
The Strait of Hormuz accounts for about one-sixth of global oil consumption and one-third of the world's liquefied natural gas (LNG) trade. Ray Dalio stated that if Iran were to maintain control or exert significant leverage over this key passage, it would amount to a “strategic victory” over Washington.
According to Dalio, such an outcome would represent more than a regional setback; it would signal a broader decline in American influence across three key pillars:
Military-due to an inability to ensure the free flow of global trade.
Political-reflecting weakened capacity to enforce international norms, protect allies.
Economic-highlighting the vulnerability of the US dollar–driven energy system to external disruptions.
US Facing Geopolitical Consequences
He added, the current scenarios are not in favour of the US. "While it was always assumed that the U.S. would be the dominant power and could win militarily and financially over its opponents (and certainly over its middling-power opponents), the cumulative effect of the military, financial, and geopolitical consequences of the wars in Vietnam, Afghanistan, Iraq, and perhaps this war with Iran, are not good for the United States and the sustainability of the post-1945 American-led world order."
About the Peace Talk
Dalio expressed skepticism regarding the ongoing talks, stating bluntly that "everyone knows that no agreement will resolve this war." He suggested that rather than de-escalation, the geopolitical landscape is shifting toward a decisive military confrontation.
According to Dalio, the most intense phase of the conflict is yet to come, and the stakes involve far more than regional borders.
Ripple Effects of the War on Currency Markets
He concluded with what effects the war will have on the global financial front: "The direct and indirect effects of this “final battle” will ripple around the world, affecting trade flows, capital flows, and geopolitical developments with China, Russia, North Korea, Cuba, Ukraine, Europe, India, Japan, etc."
Also Read: Why Energy Markets Will Be Impacted For Longer Even If Strait Of Hormuz Opens
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.