The war has disrupted energy markets, exposed the vulnerability of global supply chains, and elevated the Strait of Hormuz from a geographical chokepoint into a strategic instrument of Iranian leverage. Washington is now turning increasingly to economic coercion, hoping that sanctions can achieve what military force has not: compel Tehran to concede and restore freedom of navigation.
The new sanctions announced by Treasury Secretary Scott Bessent are designed to reinforce that strategy by raising the costs for countries and companies that continue to trade with Iran. The calculation is straightforward: access to the American market and financial system should be sufficiently valuable to make compliance more attractive than continued engagement with Tehran.
Iran, however, is hardly an inexperienced target. Decades of sanctions have forced it to develop alternative financial channels, informal trading networks, and relationships with major powers prepared to absorb or circumvent American pressure. Sanctions can therefore weaken the Iranian economy without necessarily altering Iran’s strategic calculus. When national security and regime survival are perceived to be at stake, economic pain may reinforce resistance rather than produce capitulation.
This is where Hormuz becomes critical. The Strait is not simply a maritime passage; it is one of the principal chokepoints of the global energy system. Tehran does not need to close it completely to generate enormous uncertainty. The mere threat of disruption can raise insurance premiums, freight costs, energy prices, and the geopolitical risk premium across global markets. Iran’s leverage is therefore asymmetric: a relatively limited capacity to disrupt maritime traffic can impose disproportionate costs on economies far beyond the Middle East.
China presents the most difficult test of Washington’s strategy. As the principal market for Iranian energy exports, China is directly exposed to any attempt to enforce secondary sanctions more aggressively. If Washington targets major Chinese companies or financial institutions dealing with Tehran, the Iranian crisis could rapidly become another front in the broader US-China strategic rivalry.
Beijing also possesses countervailing leverage, particularly over critical minerals, manufacturing inputs, and strategic supply chains. Escalation over Iran could therefore trigger retaliation extending well beyond the Middle East. For President Donald Trump, this creates a fundamental dilemma: a new economic confrontation with China, amid an energy shock and a prolonged war, could impose costs on the American economy that undermine the very coercive strategy intended to pressure Iran.
The deeper problem is that American power is becoming harder to translate into political outcomes. The dollar, US financial institutions, and the reach of American sanctions remain extraordinarily powerful. Coercion, however, loses effectiveness when the targeted state has access to alternative markets and major partners, particularly when the costs of enforcing compliance become high enough to encourage those partners to develop alternatives to the American-led system.
The war has demonstrated the same distinction in military terms. Destroying infrastructure and degrading capabilities can alter the balance on the battlefield, but they do not necessarily produce political submission. If Iran retains significant missile and drone capabilities, along with the ability to threaten navigation through Hormuz, military superiority alone cannot impose a settlement on American terms.
Washington’s central challenge, therefore, is no longer how to increase pressure on Iran. It is how to convert that pressure into a political exit. Sanctions without negotiations risk becoming an instrument for managing an unresolved conflict. Military operations without a credible diplomatic endgame risk producing a cycle in which every tactical success merely sets the stage for another confrontation.
Time may ultimately become the most important variable. A prolonged war drains resources, sustains pressure on energy prices, and creates growing political incentives for Washington to demonstrate that military power has produced a tangible result. With the US midterm elections approaching, the ability to end the conflict with a credible political outcome may become more valuable to Trump than the ability to prolong military pressure. Tehran, if it recognises this, may seek to turn time itself into a bargaining asset.
Hormuz therefore captures the central paradox of the conflict. Washington can raise the costs of Iran’s external economic relationships, but it cannot fully control Tehran’s response. Nor can it dictate how China, Russia, or other partners will react. The more aggressively Washington weaponises economic interdependence, the stronger the incentive for other powers to reduce their dependence on the American financial system.
The strategic question is consequently changing. It is no longer simply who can deliver the most powerful blow, but who can absorb the costs of prolonged confrontation and who can translate power into an agreement.
That distinction lies at the heart of modern statecraft. Military power can create leverage, and economic coercion can raise the price of resistance. Neither, however, guarantees political control. The ultimate measure of power is the ability to transform superiority into a stable political and security order.
That is the paradox now confronting Washington. The United States may have demonstrated that it can impose immense costs on Iran. What remains uncertain is whether it can determine the terms of the peace.
History repeatedly demonstrates that the power capable of starting a war is not necessarily the power capable of determining how it ends. In Iran and Hormuz, that may be the most important lesson of all.
* The writer is a former assistant foreign minister.
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