Strait of Hormuz Crisis: US-Iran St
The Strait of Hormuz, through which approximately 20% of the world's oil supply passes, is on the verge of closure. A 48-hour ultimatum marks a historic turning point that could trigger a cascading crisis in energy markets, Middle East security, and the global economy.
── Understand in 3 points ─────────
- • President Trump warned that the US would attack Iranian power plants if Iran did not open the Strait of Hormuz within 48 hours.
- • Iran stated it would retaliate against power plants across the Middle East that supply electricity to US military bases if attacked.
- • Iran has not softened its hardline stance, further escalating US-Iran tensions.
── NOW PATTERN ─────────
The "escalation spiral" between the US and Iran has reached the stage of a military ultimatum, creating the risk that a chain of retaliation could "contagiously" spread into an infrastructure war across the entire Persian Gulf. The structure where neither side can back down is accelerating "power overreach."
── Probability and Response ──────
• Base Scenario 50% — Whether US military attacks remain "limited," Iranian retaliation is contained to a symbolic level, or signs of backchannel diplomatic efforts (moves by the Omani Foreign Minister or Qatari Emir) emerge.
• Bullish Scenario 20% — Softening statements from Iran before the deadline, emergency diplomatic visits by Omani and Qatari leaders, an active mediation stance by the Chinese Foreign Ministry, or leaks from the US Department of Defense prioritizing a "diplomatic solution."
• Bearish Scenario 30% — The start of large-scale US airstrikes, Iran's laying of mines in the Strait of Hormuz, infrastructure attacks in multiple Gulf states, a crude oil price surge of over $20 per day, or the initiation of simultaneous attacks by Hezbollah and Houthi forces.
📡 Signal — What Happened
Why it matters: The Strait of Hormuz, through which approximately 20% of the world's oil supply passes, is on the verge of closure. A 48-hour ultimatum marks a historic turning point that could trigger a cascading crisis in energy markets, Middle East security, and the global economy.
- Military-Diplomacy — President Trump warned that the US would attack Iranian power plants if Iran did not open the Strait of Hormuz within 48 hours.
- Military-Diplomacy — Iran stated it would retaliate against power plants across the Middle East that supply electricity to US military bases if attacked.
- Military-Diplomacy — Iran has not softened its hardline stance, further escalating US-Iran tensions.
- Energy — The Strait of Hormuz is the most critical chokepoint, with approximately 20-21% of the world's seaborne oil passing through it.
- Energy — Approximately 17 million to 21 million barrels of crude oil and petroleum products pass through the Strait of Hormuz daily.
- Economy — If the Strait's closure materializes, crude oil prices could surge to over $150 per barrel.
- Regional Security — US military bases across the Middle East (e.g., Qatar, Bahrain, UAE) rely on host country infrastructure for electricity supply.
- Diplomacy — Iran's targets for retaliation include the infrastructure of Gulf states, which are supposed allies, increasing the risk of collateral damage across the region.
- Military — The US Fifth Fleet is headquartered in Bahrain and is reportedly deploying an aircraft carrier strike group in the Persian Gulf.
- International — Japan depends on the Middle East for approximately 90% of its crude oil imports, making the stability of the Strait of Hormuz fundamental to Japan's energy security.
- Finance — In response to signs of crisis, volatility in crude oil futures markets has surged, and risk premiums have expanded.
- Politics — The Trump administration has pursued a "maximum pressure 2.0" policy against Iran since his re-inauguration in 2025.
To understand the current Strait of Hormuz crisis, it is necessary to grasp the structural context of US-Iran confrontation that has accumulated over nearly half a century since the 1979 Iranian Revolution.
In 1979, the Islamic Revolution and the subsequent hostage crisis at the US Embassy in Tehran severed US-Iran relations. Since then, the two countries have repeatedly engaged in fundamental distrust and hostility, cycling through periods of confrontation despite superficial de-escalation (such as the 2015 JCPOA, the Iran nuclear deal). Particularly significant was the Trump administration's unilateral withdrawal from the JCPOA in 2018 and the imposition of a "maximum pressure" policy. While this policy pressured the Iranian economy, it also had the counterproductive effect of accelerating Iran's nuclear development. Iran's uranium enrichment has reached 60%, nearing the 90% weapons-grade level.
When Trump was re-inaugurated as president in 2025, the informal balance of restraint under the Biden administration collapsed, and "maximum pressure 2.0" was initiated. This included intensified sanctions aimed at effectively halting Iranian crude oil exports, hints of limited attacks on Islamic Revolutionary Guard Corps (IRGC)-affiliated organizations, and a re-strengthening of the US military presence in the Middle East. In response, Iran is countering by brandishing the "last card" of obstructing navigation in the Strait of Hormuz.
Let's confirm with numbers how important the Strait of Hormuz is. Through this strait, only 33 km wide, passes oil and natural gas from Saudi Arabia, Iraq, UAE, Kuwait, and Qatar. This amounts to approximately 20 million barrels per day, or about 21% of the world's seaborne oil transport. Furthermore, most of Qatar's LNG exports also pass through this strait. In other words, the closure of the Strait is a "global chokepoint" that would immediately ripple through not only energy markets but also global supply chains and financial markets.
Why "now"? Multiple structural factors are converging. First, the Trump administration's hardline policy against Iran has failed to achieve its objectives through sanctions alone and is escalating to military pressure. Second, Iran's domestic economic crisis and social unrest threaten the regime's legitimacy, making a hardline foreign policy a means of domestic governance. Third, the overall situation in the Middle East is destabilizing. The aftermath of the Israel-Hamas conflict, Houthi attacks on shipping in the Red Sea, and increased activity by Iranian-backed militias in Syria and Iraq are all raising regional tensions.
Even more critically, both the US and Iran are playing a game of chicken, assuming the other will not cross a "red line." Trump's 48-hour ultimatum and Iran's declaration of region-wide retaliation precisely illustrate the risk of this game spiraling out of control. Accidental escalation materialized in the 1988 downing of Iran Air Flight 655 and the 2020 assassination of General Soleimani. The current crisis carries an even higher level of tension than these historical precedents.
The impact on Japan is also extremely significant. Japan relies on the Middle East for approximately 88% of its crude oil imports, almost all of which pass through the Strait of Hormuz. The shock of the 2019 attacks on Japan-related tankers near the Strait of Hormuz is still fresh in memory. This crisis once again exposes the fundamental vulnerability of Japan's energy security policy.
Differential: By President Trump specifically naming power plants as military targets and setting a 48-hour deadline, the US-Iran conflict has qualitatively shifted from a "war of words" to a "countdown to concrete military conflict." Iran's declaration of retaliation against power supply infrastructure for US military bases has, for the first time, clearly raised the risk of the conflict expanding beyond a bilateral framework into an infrastructure war across the entire Middle East.
🔍 Reading Between the Lines — What the News Isn't Saying
Trump's 48-hour ultimatum is not actually aimed at destroying Iranian power plants themselves. Amidst the visible limits of "maximum pressure 2.0," the true aim is to bring Iran back to the negotiating table by playing the military intimidation card. However, having declared it so publicly, if Iran does not yield, Trump risks being labeled a "president who doesn't follow through," cornering himself. Meanwhile, Iran, by declaring "region-wide retaliation," is employing a strategy to make Gulf states reconsider the "cost of hosting US military bases," thereby shaking the foundation of the US presence in the Middle East. Both sides are engaged in a game over the "credibility of threats" rather than actual military action, but the greatest concern is the risk of this game spiraling out of control.
NOW PATTERN
Escalation Spiral × Power Overreach × Chain of Contagion
The "escalation spiral" between the US and Iran has reached the stage of a military ultimatum, creating the risk that a chain of retaliation could "contagiously" spread into an infrastructure war across the entire Persian Gulf. The structure where neither side can back down is accelerating "power overreach."
Intersection of Dynamics
The three dynamics of "escalation spiral," "power overreach," and "chain of contagion" form a dangerous complex that amplifies each other. The "escalation spiral" pushes both the US and Iran to the next stage of escalation, and in the process, both sides overestimate their capabilities and intentions, falling into "power overreach." The extreme threats issued as a result of overreach (power plant attacks, region-wide retaliation) unleash the conflict from its bilateral framework, activating a "chain of contagion." The expansion of damage due to this contagion further stimulates nationalism and fear on both sides, accelerating the "escalation spiral." This triple self-amplifying mechanism is particularly dangerous because it has the effect of blocking "exits." The more the spiral turns, the higher the cost of concession for both sides (loss of face, domestic political impact); the deeper the overreach, the more difficult it becomes to retreat; and the wider the contagion spreads, the more actors become involved, complicating negotiations. Historically, escaping such a triple trap has required either the provision of a "ladder" by external mediators (in this case, China, Turkey, Oman, etc.) or the creation of a "face-saving compromise" acceptable to both sides. However, in the current international environment, neither is easy. The only hope is the possibility that Gulf states, who would be most directly affected by the chain of contagion, might step in to mediate for their own survival, but this also assumes that both the US and Iran are willing to accept mediation.
📚 History of Patterns
1987-1988: The Tanker War (Late Iran-Iraq War)
The exchange of attacks on merchant ships in the Persian Gulf escalated, leading the US to begin escorting Kuwaiti-flagged tankers. This developed into direct clashes between the US Navy and the Iranian Navy (Operation Praying Mantis).
Structural Similarities to the Present: The use of force around the Strait is prone to accidental escalation, carrying the risk that limited military operations could develop into a full-scale conflict. Furthermore, the involvement of third-country vessels could create international repercussions.
1990-1991: Gulf War (Iraq's Invasion of Kuwait)
Iraq's military action caused crude oil prices to surge (over $40 per barrel), putting recessionary pressure on the global economy. A US-led multinational force intervened militarily and achieved a swift victory, but instability in the Middle East continued long-term.
Structural Similarities to the Present: Military conflicts in the Middle East immediately ripple through the global economy via energy markets. While short-term military victory may be possible, long-term commitment is required for regional stabilization.
2019: Tanker Attacks Near the Strait of Hormuz and Damage to Japan-Related Vessels
As the US withdrew from the JCPOA and intensified its maximum pressure policy, multiple tankers were attacked near the Strait of Hormuz. A shocking incident also occurred where a Japan-related tanker was hit during Prime Minister Abe's visit to Iran.
Structural Similarities to the Present: Intensified pressure through economic sanctions can provoke asymmetric retaliation from the cornered party. There is also a risk that third countries attempting to remain neutral may be drawn into the conflict.
2020: Assassination of General Soleimani and Retaliatory Strikes
The US killed Iran's General Soleimani in a drone strike. Iran retaliated with missile attacks on US military bases in Iraq. Both sides stated they "did not desire further escalation," and the crisis temporarily subsided.
Structural Similarities to the Present: Attacks on specific targets trigger a chain of retaliation, but restraint can prevail if both sides leave room for an "exit." However, if the targets of attack expand to include infrastructure (civilian facilities), the mechanism of restraint weakens.
1962: Cuban Missile Crisis
The US and the Soviet Union confronted each other on the brink of nuclear war, with an ultimatum and a naval blockade (quarantine) imposed. The crisis was averted through compromise via secret diplomatic channels.
Structural Similarities to the Present: In ultimatum-style confrontations, negotiations through "backchannels" separate from official channels are key to crisis avoidance. Building a mechanism for both sides to retreat while saving face is essential.
Patterns Revealed by History
The consistent patterns revealed by historical precedents are as follows. First, military tensions in the Persian Gulf and the Strait of Hormuz immediately ripple into a global economic crisis via energy markets. This contagion mechanism has been confirmed in the 1987-88 Tanker War, the 1990 Gulf War, and the 2019 tanker attacks. Second, ultimatums and retaliatory exchanges dramatically increase the risk of accidental escalation. The possibility of unintended clashes (e.g., downing of civilian aircraft, damage to neutral vessels) spiraling out of control always exists. Third, in past crises, secret diplomatic channels and mediation by third countries held the key to averting disaster. Examples include the backchannels during the Cuban Missile Crisis and mutual restraint after the 2020 Soleimani crisis. However, the current crisis also possesses elements that differ from the past. The clear expansion of attack targets to civilian infrastructure such as power plants, the declared scope of retaliation extending across the entire Middle East, and the weakening of international mediation mechanisms are new factors that make applying past lessons difficult.
🔮 Next Scenarios
After the 48-hour ultimatum expires, the US conducts a limited military demonstration (precision strikes on Iranian coastal military facilities, or cyberattacks) but avoids a full-scale attack on power plants. Iran retaliates with symbolic missile attacks near US military-related facilities in the Middle East (intentionally avoiding direct hits) but refrains from attacking civilian infrastructure. Both sides enter a temporary de-escalation phase, "saving face." During this time, informal talks mediated by Oman and Qatar progress behind the scenes. Crude oil prices temporarily rise to $100-120/barrel but stabilize in the $90s within a few weeks due to strategic petroleum reserve releases and increased production from oil-producing countries. A complete closure of the Strait of Hormuz is avoided, but shipping costs significantly increase due to surging insurance premiums and the use of alternative routes. The key to this base scenario is whether both sides can maintain the fundamental incentive structure of "not wanting a full-scale war."
Implications for Investment and Action: Whether US military attacks remain "limited," Iranian retaliation is contained to a symbolic level, or signs of backchannel diplomatic efforts (moves by the Omani Foreign Minister or Qatari Emir) emerge.
Before the 48-hour deadline, behind-the-scenes diplomatic negotiations bear fruit, resolving the crisis without military conflict. Specifically, through mediation by Oman and Qatar, Iran promises a "gradual restoration of freedom of navigation," and the US offers "temporary suspension of additional sanctions" as a condition. China also pressures Iran to exercise restraint (e.g., by hinting at a temporary halt to illicit purchases of Iranian crude oil). In this scenario, crude oil prices temporarily rise to the $90s but return to the $80s. Financial market disruption is also limited. In a more optimistic case, this crisis could even become an opportunity to initiate discussions for a new US-Iran negotiation framework (something akin to a "Hormuz Agreement"). Iranian President Pezeshkian is a relatively moderate figure, and if he can control hardliners domestically (especially the IRGC), a window for dialogue exists. However, the Trump administration has low incentive to negotiate and is likely to maintain its hardline stance, claiming "pressure worked," thus limiting the probability of an optimistic scenario.
Implications for Investment and Action: Softening statements from Iran before the deadline, emergency diplomatic visits by Omani and Qatari leaders, an active mediation stance by the Chinese Foreign Ministry, or leaks from the US Department of Defense prioritizing a "diplomatic solution."
After the 48-hour deadline, the US actually attacks Iranian power plants, and Iran retaliates as declared against US military-related infrastructure across the Middle East, leading to full-scale escalation. Iran lays mines in the Strait of Hormuz and attacks tankers attempting to pass through the strait with anti-ship missiles. The US Navy directly engages the Iranian Navy, with casualties on both sides. Hezbollah launches missile attacks on Israel, and Houthi forces further intensify attacks in the Red Sea, expanding the conflict across the entire Middle East. Crude oil prices surge to $150-200/barrel, and the global economy faces a stagflation crisis. Energy-importing countries, including Japan, fall into a severe supply crisis, and emergency energy rationing measures are considered. Financial markets decline significantly, and flight to safe-haven assets accelerates. The probability of this scenario is set high at 30%. This is because both sides have already named specific military targets (power plants, US military base infrastructure), and justification for attacks has been made in advance. Furthermore, the risk of accidental incidents (misfires, misidentification) triggering escalation cannot be ruled out.
Implications for Investment and Action: The start of large-scale US airstrikes, Iran's laying of mines in the Strait of Hormuz, infrastructure attacks in multiple Gulf states, a crude oil price surge of over $20 per day, or the initiation of simultaneous attacks by Hezbollah and Houthi forces.
Key Triggers to Watch
- Expiration of the 48-hour ultimatum (around March 25, 2026): Within 24-48 hours
- Whether the US military conducts attacks within Iranian territory: Within 1-3 days after the deadline
- Whether crude oil prices break through $100/barrel: Within 1-2 weeks
- Emergency meeting of the UN Security Council and its outcome: Within 1 week
- Moves in mediating diplomacy by China, Oman, Qatar, etc.: Within 48 hours to 1 week
🔄 Tracking Loop
Next Trigger: Expiration of the 48-hour ultimatum (around March 25, 2026) — US actions after the deadline (whether to attack, extend the deadline, or pivot diplomatically) will be the turning point determining all future developments.
Continuation of this pattern: Tracking: Progress of the US-Iran Strait of Hormuz Crisis — The next milestones are the ultimatum deadline (around March 25), the presence or absence of subsequent US military action, and the success or failure of mediating diplomacy.
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