The Price of Running the World

The Hormuz Reckoning 

Robert Watson 

 

 

The Iran conflict has produced no shortage of analysis. Commentators have declared the United States is screwed with no good way out. That observation is accurate. It is not an explanation. Others have called the war strategically incoherent. That assessment misses the point entirely.

America is not trapped by Iran. America is paying a bill.

In 1948, George Kennan wrote with rare candor that America held 50% of the world’s wealth while representing 6% of its population.^[1] The task, he said, was devising relationships that maintained that disparity. Not to spread freedom. Not to promote democracy. To maintain the disparity. That was the cost of underwriting a global system with built-in profit.

The global structures built after 1945 serve that logic. Bretton Woods. America's military base network. The petrodollar system. The alliance architecture across the Gulf. These are not accidents of history. They are the machinery of a specific economic order, built to keep America's disparity intact and facilitate global trade on American terms.

The Strait of Hormuz is a foundational piece of that order. Twenty percent of the world’s oil flows through these waters because the entire post-1945 architecture assumed America’s protection of global trade and supply chains. Remove the shield of America’s power, and the architecture’s fragility is exposed. 

 

 

Running the world under the umbrella of American power has never been free of cost, error, or friction. The US spent blood and treasure in the ill-fated wars in Korea, Vietnam, Iraq, and Afghanistan. They were peripheral conflicts designed to keep the architecture’s core intact. Iran and the Strait are different. The adversarial friction is no longer on the periphery. The physical foundation of the entire order is being contested.

Every carrier group in the Persian Gulf is one absent from the Western Pacific theater. Every precision munition expended on Iranian targets is not available for Taiwan's defense. Washington created this problem. Twenty years of wars of choice in Iraq and Afghanistan consumed America's strategic bandwidth and material capacity. Three years of arming Ukraine drew down stockpiles that have not been fully reconstituted. While the U.S. was focused on Baghdad, Kabul, and Kyiv, Beijing was focused on Tehran. China purchased cheap oil at scale to keep a sanctioned regime solvent. That twenty-five-year strategic partnership methodically turned Iran into a structural asset positioned against American interests.

 

 

Structurally dependent on Beijing, Iran has turned the Strait into a lever against the American-led global economy. Meanwhile, Russia, supplier of air defense systems and diplomatic cover to Tehran for decades, reaps the windfall of the conflict.

Beyond oil and gas, the Strait moves other critical materials. Fertilizer components that feed billions. Sulfur for semiconductors and precision munitions. Russia gains from surging global fertilizer prices, adding to Moscow’s windfall from higher oil and gas revenues. The open world economy Cordell Hull promised in 1944 turns out to run through a waterway that a regime in survival mode can partially close with cheap drones.^[2]

The post-1945 order was built on the assumption of American control of these corridors. When that assumption is directly challenged, the U.S. is compelled to respond. But force is costly. Retreat is costlier.

Yet the crisis is framed as an operational problem. How do we reopen the Strait? How do we manage escalation? How do we balance Middle East commitments against Pacific priorities?

The right question is older and harder. What is America actually defending in the Strait of Hormuz?

America is defending the order Kennan described in 1948. An order built on economic disparity, maintained by American power, and justified by a freedom narrative that obscured its true purpose.

The case for sustaining that American order is stronger than its critics admit. In 1945, the alternative was not a more equitable world. It was Soviet dominance of Eurasia, the collapse of European economies, and a return to the cartelized trading blocs that produced the Depression and then the war.^[3] Someone had to build a new system and keep the world trade corridors open. The prosperity of billions depended on it.

The order was necessary. The mythology was not.

America cannot think clearly about the Strait of Hormuz because it has never thought clearly about what the Strait represents. Not a freedom of navigation principle. Not a rules-based order abstraction. The Strait of Hormuz is a foundational piece of an economic system that has underwritten eighty years of global prosperity and stability. America and Europe have prospered while China and India have lifted over a billion people out of poverty within that American order.

The question was never whether the system was worth sustaining. It was whether America was willing to be honest about the price of running the world.

The crisis in the Strait of Hormuz just made that question unavoidable.

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^[1] Department of State, Policy Planning Study (PPS) 23 Foreign Relations of the United States (FRUS), 1948, vol.1 (part 2), February 24, 1948, p. 23.

^[2] William Appleman Williams, Empire as a Way of Life (New York, NY: Ig Publishing, 2007), p. 163.

^[3] The postwar American order as a rational response to a genuine structural threat rather than simple imperial ambition is argued across the post-revisionist historiography. See Melvyn P. Leffler, A Preponderance of Power (Stanford University Press, 1992); William Appleman Williams, The Tragedy of American Diplomacy (World Publishing, 1959); Dale Copeland, Economic Interdependence and War (Princeton University Press, 2015).