If two decades of American war planning predicted that attacking Iran would close the Strait of Hormuz, why are we still told the closure was a blunder?
Fast Track
Ryan Perkins, an English economist who has worked in China for twenty years, argues in "They Wanted This" that the Iran war's most damaging consequence was not an accident. US strategic literature had long treated a closure of Hormuz as a near-certainty. The shortages that followed (oil, gas, fertiliser, helium) fall hardest on China, India and the dollar-dependent economies of the Global South, and lightest on the United States. If he is right, a strait that stays half-open is a lever rather than a failure. The catch is that the same lever is spending the credibility on which American financial power rests.
Introduction
Since the United States and Israel attacked Iran on 28 February 2026, the Strait of Hormuz has been closed, half-open, briefly reopened under a June memorandum, and closed again after the ceasefire collapsed in July. For most Western commentary, the story is one of miscalculation: a war launched without a plan for its most obvious consequence, and an administration that keeps announcing a reopening that never quite arrives.
Ryan Perkins offers an inversion. An English academic who has lived and worked in China for two decades, he spoke to an Australian commentator after both attended the Mingde Strategic Dialogue, a tour of Chinese cities for foreign analysts. His argument is that the closure was not the failure of the policy but its function. The question he poses is not when will the strait reopen? but what if it isn't supposed to?
This article sets out his case, tests it against the evidence that can be checked, and weighs where it is strong and where it overreaches. The aim is not to decide whether Perkins is right in every detail. It is to see what changes when we stop treating a persistent outcome as an accident and start asking who it serves.
Why It Matters
Before the war, roughly a fifth of the world's seaborne oil passed through Hormuz, along with large volumes of liquefied gas, fertiliser and industrial inputs. Its restriction shows up in fuel prices from Perth to Lagos, in fertiliser costs at planting time and, months later, in the price of food. If the disruption is a by-product, policy should aim at reopening it and waiting is reasonable. If it is an instrument, reopening may never be the goal, and every country that depends on Gulf energy, and pays for it in dollars, needs to plan for a long squeeze rather than a short shock.
Contents Cover the Following
1. A predictable surprise
1.1 What the planners always said
Perkins began with an unease rather than a theory. When the war started, the explanation on offer did not add up, so he went back to the record. He worked through the significant American strategic literature on war with Iran published since about 2005: studies from the US Naval War College, the Congressional Research Service, RAND, the Atlantic Council, CSIS and others. He was not looking for any single recommendation, since such reports disagree on much. He was looking for what they agreed on across institutions and across two decades.
He reports two points of consensus. The first is that a short, sharp regime-change operation in Iran would fail, and a longer campaign would also fail without a major ground invasion, which nobody seriously contemplates against a country of more than ninety million people. The second is that in any such war Iran would close the strait. In his reading, the literature treats this not as a tail risk but as an expected result: even if Iran cannot hold the waterway shut by force for long, it can make it uninsurable, and an uninsurable strait is a closed one.
This is Perkins' reading of a large body of work, and it has not been independently reviewed for this article. But the broad expectation was hardly hidden. Before the war, bank analysts were openly modelling oil at $100 to $120 a barrel in the event of a sustained closure. The step Perkins then takes is an inference, and he labels it as one: if an outcome is known in advance, there is a good case for saying it was intended. He has, he says, no documents to prove it. What he has is a hypothesis worth testing.
"If you know a particular outcome is going to come from your actions, there's a good case for saying that that's what you intended to happen." – Ryan Perkins
1.2 The convenience of incompetence
His second clue was the tone of the coverage. Across the Western media, from left to right, the dominant explanation was incompetence. Perkins finds that suspicious. In his experience, genuine incompetence is something institutions try to hide. Incompetence offered openly as an explanation can serve another purpose: it bridges the gap between a policy and what the public would have accepted had it been proposed in advance.
This is a heuristic, not evidence, and taken alone it proves nothing. Its value is that it suggests a test. If the closure was really an accident, its costs should fall more or less at random. If it was intended, or at least welcomed, its costs should fall in a pattern that serves an identifiable interest. The next two sections follow the cargo to see where the costs land.
2. Following the cargo
2.1 More than oil
Hormuz is usually discussed as an oil story, but the cargo is broader. Through it pass crude, liquefied natural gas, refined products, nitrogen fertilisers such as urea and ammonia, sulphur, and hard-to-source industrial inputs such as helium. In the first eight months of 2026, crude exports from the Gulf fell by about 30 per cent year on year, and the Gulf's share of world seaborne crude trade dropped to under 30 per cent from a historical norm of around 40.
The point about the wider cargo is that shortages travel. Energy-intensive industries (petrochemicals, aluminium, fertilisers, semiconductors) are hit first, and the disruption then spreads through manufacturing. A fertiliser shortage at planting time becomes a food price rise at harvest.
2.2 Who pays the most
The costs do not fall evenly. By May 2026 the United States had become the world's largest oil exporter, and it buys little Gulf energy. ECB economists estimate that Gulf energy makes up only around 10 per cent of total energy imports in the euro area, the United Kingdom and the United States. For much of Asia the share is several times higher. Perkins names India, Brazil and China as disproportionately affected, alongside the wider Global South.
2.3 The dollar door
The deepest layer of his argument is about currency. A country with a hard currency, such as the United States, Britain or the eurozone, pays for imports largely in money it can issue or borrow cheaply. Most countries cannot. They must buy their oil and fertiliser in dollars, from a limited stock of reserves. When prices jump, those reserves drain.
At that point, Perkins argues, a door opens for the IMF, the World Bank and the Asian Development Bank. Their emergency packages come with conditions, often including privatisation and the sale of state assets, that draw the borrower back into the dollar system just as many Global South governments had been trying to reduce their dependence on it. The vulnerability of soft-currency economies to commodity shocks is well established. Perkins' contested step is to read it as the purpose of the policy, as part of a long American effort to defend the dollar's global position.
3. China's hidden soft spot
3.1 The ECB's map
On 2 July 2026, three European Central Bank economists published scenarios for a prolonged halt to Gulf energy exports. In the worst case, euro area production could fall by up to 3 per cent if firms could not replace lost supplies, but only by 0.4 to 0.6 per cent if they could substitute successfully. According to Perkins' reading of the paper, the direct production losses are largest in South Korea (up to 11 per cent), India (around 8), Japan (around 7) and ASEAN (up to 5), with the United States barely affected.
The finding Perkins stresses comes from the paper's dynamic analysis. China, he reports, ends up worse off than either the euro area or the United States: not because its direct energy dependence is the highest, but because of its central place in energy-intensive manufacturing chains. On his account of the figures, Chinese growth runs 0.8 percentage points below baseline in 2026 and 1.1 points in 2027, with inflation elevated through 2028. Some economists dispute the model. Perkins' reply is that this misses the point: right or wrong, the paper shows what one of Washington's own partners expects to happen.
3.2 What COVID taught
In a paper published in September 2025, before the war, Perkins examined how Chinese manufacturing handled the supply-chain crunch of 2022. Import prices into the sector spiked, but output prices did not. Producer price inflation surged while consumer price inflation stayed subdued, which meant the factories were absorbing the global inflation wave on everyone else's behalf.
The reasons are structural. Chinese export manufacturing is capital-intensive and energy-intensive, works through dense domestic supply chains where each stage adds energy costs, runs on thin margins, and competes on price in markets where it cannot easily raise them. Beijing responded quickly and effectively: deferred utility bills and taxes, direct subsidies, and very cheap bank loans. The rescue worked, but it was extremely expensive, and the government could afford it because it knew the problem was temporary.
3.3 Duration is the weapon
That is where duration becomes decisive. A short shock can be bridged. A shock with no end in sight turns the bridge into a permanent subsidy, which the state would have to fund while its resources were needed elsewhere.
Perkins finds his clearest signal in the words of US Treasury Secretary Scott Bessent. In an August interview, Bessent said that within two years the strait would become irrelevant, as 50 to 70 per cent of its energy traffic moved through new pipelines, leaving it just another body of water. On 1 September, at the G20 finance meeting in Asheville, he went further, calling it a future "worthless piece of water". If the aim were to restore the old order, Perkins argues, the language would be about reopening and normalising. Instead it is about permanence.
Energy analysts doubt the timeline: the pipelines are at varying stages, and liquefied gas cannot be piped around the strait at all. But that objection does not weaken Perkins' point; it strengthens it. Washington's own planning horizon now assumes a constrained strait for years. China is not defenceless. It controls the commanding heights of its economy, has invested heavily in renewables and spare capacity, and adapted fast: its crude imports in June 2026 were 41 per cent lower than a year earlier as it drew on stocks, burned more coal and bought more from Russia and Southeast Asia. The question is not whether China can survive the squeeze, but what it costs to do so year after year.
A short shock can be bridged. A shock with no end in sight turns the bridge into a permanent subsidy.
4. The second front: Ukraine, fertiliser and the Black Sea
From Odesa to Kharkiv, Russia is taking back Lenin's 1922 gift of Nouveau Rossiya to Ukraine. Now let us look at some of Ukraine's moves in the light of Perkin's thesis.
The timeline is established fact. On 25 February 2026, Ukrainian drones struck the Dorogobuzh nitrogen fertiliser plant in Russia's Smolensk region, killing seven people. The plant, owned by Acron and producing about two million tonnes of nitrogen nutrients a year, was expected to stay idle until May. Three days later, the United States and Israel attacked Iran, stranding a large share of the world's seaborne fertiliser behind a closed strait just as the northern hemisphere's planting season began. Through 2026, Ukraine also ran a sustained campaign against Russian refineries and export terminals, and escalation in the Black Sea led to restrictions on shipping there, including grain.
Perkins reads these events as one picture: a coordinated destruction of energy and fertiliser supply across Eurasia, with Venezuela part of the same pattern, timed so that food and fuel shortages converge in the last quarter of 2026. That is a falsifiable prediction, and readers will be able to judge it within weeks. He also notes that Iran has denied responsibility for some strikes on Gulf facilities while readily claiming others.
The case for coordination rests on capability. Both speakers argue that Ukraine could not conduct deep strikes at this scale without Western satellites, intelligence and targeting support, which could be withdrawn at will. The interviewer cites a source working on NATO contracts who says the alliance facilitates such strikes, and points to published reporting on British and American involvement in Ukrainian operations. Western support for Ukraine's long-range campaign is widely reported. That the strikes were timed to serve a strategy aimed at China is an inference. There is also a simpler explanation for each strike taken alone: Ukraine has its own reasons to hit Russian export revenue and plants that make ammonium nitrate, a precursor for explosives. Coincidence cannot be ruled out; neither can design.
5. The Atlantic rift that isn't
Much is made of apparent splits between Washington and Europe over Ukraine and Russia. Perkins thinks they are largely cosmetic. To understand the relationship, he argues, look at its balance sheet: around $7 trillion of transatlantic direct investment, by far the largest bilateral relationship of its kind, binding the two economies together. Within that relationship the power runs one way. The euro depends on dollar markets for international funding, and in a crisis European institutions rely on dollar liquidity they cannot create themselves. The eurozone debt crisis of a decade and a half ago deepened that dependence.
Read this way, public quarrels serve a domestic purpose. Washington has long pressed its allies to carry more of their own defence. European governments must justify that spending to voters, and the message that America is walking away and Russia may be next does the job. Perkins points to the 2025 trade arrangement between Ursula von der Leyen and Donald Trump, which included commitments to buy large quantities of American weaponry, much of it, he expects, to be built under licence in Eastern Europe with German finance.
The interviewer adds an argument from first principles. A threat needs both intent and capability, and he sees neither for a Russian attack on NATO beyond grey-zone actions that stay below the threshold of war. He expects European states to start arming against each other as well, since intentions change faster than capabilities.
6. The case against the theory
An argument this ambitious deserves its strongest objections, and there are several.
Foreseeable is not the same as intended. Governments often go to war accepting costs they know will follow. Treating a known risk as an accepted price is very different from treating it as the goal. Proving intent needs evidence of a decision, which Perkins concedes he lacks.
The pain is not neatly targeted. Among the hardest-hit economies are close US allies: Japan, South Korea and the eurozone, where the ECB raised rates in June for the first time in three years. American drivers paid more at the pump in an election year. And Washington has visibly pushed for reopening: President Trump demanded that NATO and China help, signed a memorandum in June meant to restore shipping, and launched naval operations to escort traffic.
The lever leaks. From early March, Iran allowed approved ships through, mostly tankers bound for China and India. China cut imports, drew down stocks, switched to coal and leaned on Russian supply. A weapon that the target can partly route around is a blunt one.
Simpler explanations exist. Israel's security goals, the nuclear question and a misplaced belief in a quick result may explain the war without any grand design. The interviewer himself thinks Washington underestimated how effectively cheap drones would push American forces out of the region.
Perkins has an answer to some of this. His theory does not require control of the strait, only the ability to raise or lower pressure on it. In his article he describes a zone between full closure, which would hurt everyone including the United States, and full reopening, which would remove the leverage. On this view, public demands to reopen are compatible with private comfort at the result. The fairest verdict is that the argument is strongest as a description of the incentives that now exist and weakest as a claim about what was in anyone's mind on 28 February.
The argument is strongest as a description of the incentives that now exist, and weakest as a claim about what was in anyone's mind on 28 February.
7. The tide beneath the waves
Perkins places the Iran war in a longer arc. In his account, American foreign policy this century has been driven by the defence of dollar hegemony through the containment of China, in three phases. The War on Terror sought military control of energy resources and bogged down in Iraq. From around 2011, the Arab Spring era relied on proxies and colour revolutions that proved impossible to control. From about 2014, the wars in Ukraine and Iran became the vehicles. This is interpretation rather than established history, and each phase has other well-known explanations.
Beneath it, he sees a slow economic tide that a 24-hour news cycle trains Western audiences to miss. Decades of financialisation have built a pyramid of financial claims that grows faster than the real economy beneath it. That "fictitious" wealth must periodically be converted into real things (pensions, mansions, private jets), and the strain of doing so drives the desperation behind wars abroad. He contrasts this with China's accumulation of real assets: railways, buildings, universities. He links the same pressure to rising domestic repression in the West, from immigration enforcement on American streets to arrests for social-media posts in Britain, and argues that fascism has historically been an economic emergency response, with ideology added afterwards as justification. These are the most contestable claims in the interview, and readers will weigh them differently.
The interviewer pushes the logic to an awkward conclusion. If this is a strategy of desperation, it may be self-defeating. Reputation, as Henry Kissinger stressed, is a strategic asset, and allies who watch their fuel bills climb while the rules-based order is mocked do not forget quickly. Pressure on Russia and China at once has pushed them together; in Perkins' phrase, they now stand back to back. China, he adds, has no expeditionary military and no wish to build one: its vision is multilateral, a world of equal sovereign states, rather than a contest of a few great powers. On this reading, the effort to prevent a multipolar world may be accelerating it.
Bottom Line
Perkins' most useful contribution is a change of question. Whether or not anyone in Washington planned a half-open strait, a half-open strait is what exists, and it distributes pain in a recognisable pattern: least to the issuer of the world's reserve currency, more to Europe, most to manufacturing Asia and to the countries that must buy their energy in someone else's money. His claim about original intent remains unproven, and the counterarguments are real. His claim about who benefits from the present arrangement is much harder to dismiss.
The wider implication cuts in two directions. For energy importers, it means planning for a long squeeze rather than waiting for normal service to resume. For Washington, it means that even a lever that works has a price: every month the strait stays half-shut, allies count the cost, rivals draw closer, and the trust that underpins the dollar's role wears a little thinner. When a so-called failure persists, and its costs fall consistently on one's rivals, at what point does the difference between accident and design stop mattering?
Deep Dive: the Petroyuan Trap in brief
The interview draws on a series Perkins calls the Petroyuan Trap hypothesis. In outline, it proposes three successive blows to China's economic sovereignty: an energy shock through Hormuz, a food shock through disrupted fertiliser and grain, and, he postulates, a speculative attack on the offshore yuan. Each is meant to reduce the state's capacity to absorb the next. He connects this to calls in 2026, including from German Chancellor Friedrich Merz in June and in the Wall Street Journal, for a new Plaza Accord to force a revaluation of the renminbi, echoing the 1985 agreement that pushed up the Japanese yen. Perkins notes that China in 2026 is not Japan in 1985: it has nuclear weapons, a powerful military, deep industrial capacity and leverage over Western supply chains, which is why, on his account, pressure must be applied indirectly, at the edges of the Chinese system. This is a hypothesis about strategy, not an established account, and readers can follow its development in his series (see Further Reading).
Glossary
Strait of Hormuz – the narrow channel between Iran and Oman linking the Gulf to the open ocean; before the war it carried about a fifth of the world's seaborne oil.
Hard currency – a currency widely accepted in international trade and finance, such as the dollar, euro or pound, which lets its issuer pay for imports in its own money.
Conditionality – the policy conditions attached to emergency loans from the IMF, World Bank and similar lenders, such as spending cuts or privatisation.
Producer Price Index (PPI) – a measure of the prices businesses receive for their output; a rise in PPI without a matching rise in consumer prices means firms are absorbing costs.
Consumer Price Index (CPI) – the standard measure of the prices households pay for goods and services.
Financialisation – the growing weight of finance and financial claims in an economy relative to the production of goods and services.
Fictitious capital – Perkins' term, after Marx, for financial wealth that represents claims on future production rather than real assets.
Multilateral and multipolar – a multipolar world has several great-power centres; a multilateral one, as Perkins describes China's aim, treats all sovereign states as equals.
War-risk insurance – marine cover for ships entering conflict zones; when insurers withdraw it, a route becomes commercially unusable even without a physical blockade.
Grey-zone action – hostile activity, such as sabotage or cyber attacks, kept deliberately below the threshold that would count as an act of war.
Plaza Accord – the 1985 agreement among major economies to push down the dollar, which forced a sharp rise in the Japanese yen.
References
- Ryan Perkins, The Strait Isn't Supposed to Reopen, Ryan Perkins Geopolitics, 9 October 2026.
- European Central Bank, blog on Gulf supply-shock scenarios by Pablo Aguilar, Lukas Boeckelmann and Antoine Kornprobst, 2 July 2026.
- Cyprus Mail, Gulf supply shocks could hit euro area growth, warns ECB, 3 July 2026.
- Intereconomics, A critical inputs playbook: what the Strait of Hormuz tells Europe, 2026.
- MUFG Americas, Strait of Hormuz closure would be different, 19 February 2026.
- Hellenic Shipping News, China accounting for 19% of global crude oil trade, 2026.
- South China Morning Post, China's crude purchases plunge in June, July 2026.
- Bank of Finland BOFIT, Weekly Review 18/2026.
- NPR, Can oil pipelines replace the Strait of Hormuz?, August 2026.
- Korea Times, Bessent says Strait of Hormuz would be 'worthless piece of water', 2 September 2026.
- The Moscow Times, Ukrainian drone attack on Smolensk region fertilizer plant kills 7, 25 February 2026.
- Bloomberg, Russian fertilizer plant hit by drones to stay shut until May, 17 March 2026.
- Kyiv Post, Ukrainian drone strike on Russian chemical plant in Smolensk, 25 February 2026.
- Wikipedia, 2026 Strait of Hormuz campaign and 2026 Iran war ceasefire.
Further Reading
- Ryan Perkins, The Petroyuan Trap: The U.S. Plan to Break China's Economic Sovereignty and Economic Chemotherapy: America's Desperate Plan to Save Hegemony.
- Elbridge Colby, The Strategy of Denial (Yale University Press, 2021), which Perkins cites for the shift in US strategy toward China.
0 comments:
Post a Comment
Keep it clean, keep it lean