Strait of Hormuz Crisis — US-Iran "Spiral
The Strait of Hormuz, through which approximately 20% of the world's oil shipments pass, is on the brink of closure, and a 48-hour ultimatum represents a historic turning point that could trigger a cascading crisis in energy markets, Middle East security, and the global economy.
── 3 points to understand ─────────
- • President Trump warned Iran that he would attack Iranian power plants if the Strait of Hormuz was not reopened within 48 hours.
- • Iran stated that if attacked, it would retaliate against power plants across the Middle East that supply electricity to US military bases.
- • Iran has not softened its hardline stance, and tensions between the US and Iran have escalated further.
── NOW PATTERN ─────────
The US-Iran "spiral of conflict" 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 "overreach of power."
── Probabilities and Responses ──────
• Base case 50% — Whether US military attacks remain "limited," Iranian retaliation is contained to a symbolic level, or signs of clandestine diplomatic channels emerge (e.g., movements by the Omani Foreign Minister or the Emir of Qatar).
• Bull case 20% — Softening statements from Iran before the deadline, emergency foreign visits by Omani and Qatari leaders, active mediation efforts by China's Ministry of Foreign Affairs, or leaks from the US Department of Defense prioritizing a "diplomatic solution."
• Bear case 30% — Commencement 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, and 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 shipments pass, is on the brink of closure, and a 48-hour ultimatum represents 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 Iran that he would attack Iranian power plants if the Strait of Hormuz was not reopened within 48 hours.
- Military & Diplomacy — Iran stated that if attacked, it would retaliate against power plants across the Middle East that supply electricity to US military bases.
- Military & Diplomacy — Iran has not softened its hardline stance, and tensions between the US and Iran have escalated further.
- Energy — The Strait of Hormuz is the most critical choke point, through which approximately 20-21% of the world's seaborne oil transport passes.
- Energy — Approximately 17-21 million barrels per day of crude oil and petroleum products pass through the Strait of Hormuz.
- Economy — If the strait 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 the host nations' infrastructure for electricity supply.
- Diplomacy — Iran's retaliation targets include the infrastructure of Gulf states, which are supposed to be allies, raising the risk of region-wide collateral damage.
- Military — The US Fifth Fleet is headquartered in Bahrain and is reportedly deploying a carrier strike group in the Persian Gulf.
- International — Japan relies on the Middle East for approximately 90% of its crude oil imports, and the stability of the Strait of Hormuz is fundamental to Japan's energy security.
- Finance — In response to signs of crisis, volatility in the crude oil futures market has surged, and risk premiums have expanded.
- Politics — Since his re-inauguration in 2025, the Trump administration has pursued a "maximum pressure 2.0" policy against Iran.
To understand the current Strait of Hormuz crisis, it is necessary to grasp the structural context of US-Iran conflict 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 cycled through fundamental distrust and hostility, despite periods of apparent de-escalation (such as the 2015 JCPOA, or Iran nuclear deal). Particularly important was the Trump administration's unilateral withdrawal from the JCPOA in 2018 and the imposition of its "maximum pressure" policy. While this policy squeezed the Iranian economy, it also had the counterproductive effect of accelerating Iran's nuclear development. Iran's uranium enrichment level reached 60%, approaching the weapons-grade level of 90%.
When Trump was re-inaugurated as president in 2025, the informal balance of restraint during the Biden administration collapsed, and "maximum pressure 2.0" was initiated. This involved strengthened sanctions effectively aiming to reduce Iranian oil exports to zero, hints of targeted attacks on organizations related to the Islamic Revolutionary Guard Corps (IRGC), and a re-strengthening of the US military presence in the Middle East. Iran, in response, countered by brandishing the "final card" of disrupting navigation in the Strait of Hormuz.
Let's confirm with numbers why the Strait of Hormuz is so crucial. Through this strait, merely 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. In addition, the majority of LNG exports from Qatar also transit this strait. In other words, a closure of the strait is a "global choke point" that would immediately ripple through not only energy markets but also global supply chains and financial markets.
Why "now"? Multiple structural factors are converging. Firstly, the Trump administration's hardline stance against Iran has failed to achieve its objectives through sanctions alone, escalating to military pressure. Secondly, economic crisis and social unrest within Iran threaten the regime's legitimacy, making a hardline foreign policy a means of domestic governance. Thirdly, the overall situation in the Middle East is destabilizing. The aftermath of the Israel-Hamas conflict, Houthi attacks on ships in the Red Sea, and increased activity by Iran-backed militias in Syria and Iraq are all raising the overall level of regional tension.
Even more critically, both the US and Iran are engaged in a game of chicken, drawing "red lines" while assuming the other will not cross them. Trump's 48-hour ultimatum and Iran's declaration of region-wide retaliation precisely indicate the risk of this game spiraling out of control. The risk of accidental escalation materialized during 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 implications for Japan are 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-linked 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.
The delta: By explicitly naming power plants as a specific military target and setting a 48-hour deadline, Trump qualitatively transformed the US-Iran conflict from a "war of words" to a "concrete countdown to military confrontation." Iran's declaration of retaliation against power supply infrastructure for US military bases explicitly raised, for the first time, the risk of the conflict expanding beyond bilateral scope 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, in fact, aimed at the destruction of Iranian power plants itself. The true objective is to force Iran back to the negotiating table by playing the military intimidation card, as the limits of "maximum pressure 2.0" against Iran become apparent. However, having made this public declaration, there is a risk of being labeled a "president who doesn't follow through" if Iran does not yield, effectively cornering himself. Iran, by declaring "region-wide retaliation," is employing a strategy to make Gulf states re-evaluate the "cost of hosting US military bases," thereby undermining the foundation of US presence in the Middle East. Both sides are playing a game centered on the "credibility of their threats" rather than actual military action, but the greatest concern is the risk of this game spiraling out of control.
NOW PATTERN
Spiral of Conflict × Overreach of Power × Chain of Contagion
The US-Iran "spiral of conflict" 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 "overreach of power."
Intersection of Dynamics
The three dynamics of "spiral of conflict," "overreach of power," and "chain of contagion" form a dangerous complex that mutually reinforces itself. The spiral of conflict pushes both the US and Iran to the next escalation step, during which both fall into "overreach of power" by overestimating their own capabilities and intentions. The extreme threats issued as a result of overreach (power plant attacks, region-wide retaliation) unleash the conflict from a bilateral framework, activating the "chain of contagion." The expanding damage caused by this contagion further stimulates nationalism and fear on both sides, accelerating the "spiral of conflict." What is particularly dangerous about this triple-reinforcement mechanism is its effect of blocking "exits." The more the spiral rotates, the higher the cost of concession for both sides (loss of face, domestic political repercussions); the deeper the overreach, the harder it is to retreat; and the wider the contagion spreads, the more parties become involved, complicating negotiations. Historically, escaping such a triple trap requires 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, neither is easy in the current international environment. The only hope is the possibility that the Gulf states, who would be most directly affected by the chain of contagion, might undertake mediation for their own survival, but this also presupposes that both the US and Iran are willing to accept mediation.
📚 Patterns of History
1987-1988: Tanker War (Late Iran-Iraq War)
The exchange of attacks on merchant vessels in the Persian Gulf escalated, leading the US to provide escort for 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 a seemingly limited military operation could develop into a full-scale conflict. Furthermore, the involvement of third-country vessels can broaden international implications.
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 coalition intervened militarily and achieved a swift victory, but the destabilization of the Middle East persisted long-term.
Structural similarities to the present: Military conflicts in the Middle East immediately ripple through the global economy via energy markets. While military victory may be possible in the short term, long-term commitment is required for regional stabilization.
2019: Tanker Attacks Near the Strait of Hormuz and Damage to Japan-linked 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 occurred when a Japan-linked 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. Furthermore, third countries attempting to remain neutral also face the risk of being drawn into the conflict.
2020: Assassination of General Soleimani and Exchange of Retaliation
The US assassinated 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 can 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 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 clandestine diplomatic channels.
Structural similarities to the present: In ultimatum-style confrontations, negotiations through "back channels" separate from official ones are key to crisis avoidance. Establishing 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. Firstly, military tensions in the Persian Gulf and the Strait of Hormuz immediately spread to global economic crises via energy markets. This contagion mechanism has been confirmed in the 1987-88 Tanker War, the 1990 Gulf War, and the 2019 tanker attacks. Secondly, the exchange of ultimatums and retaliation dramatically increases the risk of accidental escalation. The possibility of unintended conflicts (e.g., downing of civilian aircraft, damage to neutral vessels) spiraling out of control always exists. Thirdly, in past crises, clandestine diplomatic channels and third-party mediation held the key to averting disaster. Examples include the Cuban Missile Crisis's back channels and the mutual restraint after the 2020 Soleimani crisis. However, the current crisis also possesses elements that differ from the past. The explicit expansion of attack targets to civilian infrastructure like 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 military facilities along the Iranian coast, 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. The crisis temporarily enters a lull, with both sides having "saved face." During this period, informal talks mediated by Oman and Qatar proceed clandestinely. 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 nations. The Strait of Hormuz does not face a complete closure, but soaring insurance premiums and the use of alternative routes significantly increase transportation costs. The key to this base case scenario lies in whether both sides can maintain the fundamental incentive structure of "not wanting a full-scale war."
Implications for Investment/Action: Whether US military attacks remain "limited," Iranian retaliation is contained to a symbolic level, or signs of clandestine diplomatic channels emerge (e.g., movements by the Omani Foreign Minister or the Emir of Qatar).
Before the 48-hour deadline, clandestine diplomatic negotiations bear fruit, and the crisis resolves without military conflict. Specifically, through mediation by Oman or Qatar, Iran promises a "gradual restoration of freedom of navigation," and the US offers "temporary suspension of additional sanctions" as a condition. China also exerts pressure on Iran to exercise restraint (through hints of temporarily halting illicit purchases of Iranian crude oil). In this scenario, crude oil prices temporarily rise to the $90s before returning to the $80s. Financial market disruption also remains limited. In an even more optimistic case, this crisis could serve as an impetus for discussions on a new US-Iran negotiation framework (what might be called a "Hormuz Agreement"). Iranian President Pezeshkian is considered relatively moderate, and if he can control domestic hardliners (especially the IRGC), a window for dialogue exists. However, the Trump administration has low incentive to engage in negotiations and is more likely to continue its hardline approach, claiming "pressure worked," thus limiting the probability of an optimistic scenario.
Implications for Investment/Action: Softening statements from Iran before the deadline, emergency foreign visits by Omani and Qatari leaders, active mediation efforts by China's Ministry of Foreign Affairs, 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 against US military-related infrastructure across the Middle East as declared, leading to a 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 per barrel, and the global economy faces a stagflation crisis. Energy-importing nations, including Japan and other Asian countries, 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 at a relatively high 30%. This is because both sides have already explicitly named specific military targets (power plants, US military base infrastructure), and the justification for attack has been pre-established. Furthermore, the risk of accidental incidents (mis-fire, misidentification) triggering escalation cannot be ruled out.
Implications for Investment/Action: Commencement 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, and 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
- Crude oil price breaking $100/barrel: Within 1-2 weeks
- Convening of an emergency UN Security Council meeting and its outcome: Within 1 week
- Moves for mediation diplomacy by China, Oman, Qatar, etc.: 48 hours to 1 week
🔄 Tracking Loop
Next Trigger: Expiration of the 48-hour ultimatum (around March 25, 2026) — The US's actions after the deadline (whether to attack, extend the deadline, or shift diplomatically) will be the turning point determining all future developments.
Continuation of this pattern: Tracking: Evolution 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 mediation diplomacy.
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