This post is opinion only. See full disclaimer below.
It is entirely possible that the Hormuz Strait crisis resolves tomorrow. The United States still commands extraordinary military resources, and history shows that overwhelming American force can, at times, compel adversaries to step back. The US appears at this point to be ratcheting up the attacks to an unprecedented degree. A decisive series of strikes, a diplomatic breakthrough leading to a lasting negotiated pause, or a regional intervention could still possibly reopen the Strait of Hormuz and restore the predictable flows on which global markets so depend. But any broader Weberian macro‑political account has to recognize the deeper structural risk: the U.S. is confronting a millennial regime that may not respond to transactional incentives. Iran’s political logic is not built on short‑term bargaining but on endurance, sacrifice, and the belief that legitimacy is in certain instances strengthened through confrontation rather than concession.
This is where the Socratic carpenter analogy becomes relevant that I have written about elsewhere. Socrates talks about the carpenter who thinks that every problem can be understood in terms of what he knows, carpentry. Trump often approaches geopolitics as if every problem is a deal — a matter of leverage, incentives, and negotiation. That perspective has served him in many domains, but it becomes limiting when the adversary is not operating in a transactional frame. I have raised the issue for some time of whether he is operating fully in terms of real-politik or not. If as he seems to believes that earlier ground wars in the Middle East were unnecessary, he may be unable to shift into a fuller real-politik framework when facing a regime that does not fear pain, does not fear isolation, and does not fear escalation. The danger is not that he lacks options, but that his conceptual playbook may prevent him from recognizing which options are actually necessary or his psychology may not allow him to concede when his initial approach proves unworkable.
A Weberian analysis highlights the distinction between authority and the capacity to enforce order. The U.S. can issue commands, conduct precision strikes, and declare red lines, yet it cannot easily translate these into stable control of what is a very vulnerable maritime transit point. Iran, meanwhile, retains a form of charismatic‑revolutionary authority that treats suffering as a strategic resource. Iran may also view Hormuz as a key to its strategic power as a nation and a long term future counterweight to American power that it is not willing to give up. In this asymmetry, the United States can severely destroy assets but cannot compel compliance; Iran can absorb punishment yet still deny passage. The strategic problem for the US is not metaphysical but administrative: modern state power is constrained not by intent but by the limits of what it can physically secure.
And Iran has already demonstrated this resilience. Weeks of what we have been told by US authorities has been some of the most intense bombing in the history of warfare have not broken the regime, nor have they eliminated its capacity to close Hormuz. This endurance reinforces Tehran’s belief that it can survive escalation, including even the possibility of a U.S. ground invasion. If Iran has gamed out that it can inflict high costs in such an invasion scenario and deny occupation in what is a huge country, then even the threat of invasion becomes a lever rather than a deterrent. Trump, for his part, often resists resetting course when he believes his brand would be tarnished by doing so. Can Trump possibly admit that perhaps the Bush’s approach to war which required major ground forces was in some ways necessary after years of arguing rhetorically the opposite. That rigidity creates a dangerous feedback loop: an adversary willing if necessary to absorb pain facing a leader reluctant to revise strategy.
The oil‑system risk sits directly on top of this political structure. The press has recently reported that Iran has warned that if its power infrastructure is attacked, the Red Sea route will be degraded or closed. If this were to occur and Hormuz also remains shut, the world would confront a potentially very severe oil cliff: not only a speculative spike but an actual very difficult to mitigate structural shortage of deliverable barrels. In that regime, analysts suggest Brent could move into the 150–250 dollar range or higher simply because the logistical architecture of global energy cannot absorb simultaneous key transit point failures. Even short of that extreme case if Hormuz remains largely shut through the end of the summer the oil price may face a major spike as reserves are already stretched thin by months of dislocation. The consequences could potentially be severe — inflationary pressure, supply‑chain disruption, political instability, and emergency measures from consuming nations. And there is a further political danger: if the US administration downplays the crisis and events later contradict the broadcasted narrative, public reaction may be harsher than if the risks had been fully acknowledged upfront. Initiatives meant to project strength or business as usual — from cultural signaling in the military with testosterone testing to election‑integrity messaging when the public expected some commentary on the Iran war instead — may not play well against a backdrop of later soaring energy prices.
This intersects with a broader psychological dynamic I’ve written about elsewhere. In the group‑psychology framework of W.R. Bion, the “basic assumption dependence” model warns that when a charismatic leader cannot deliver the protection or stability the group expects, the resulting disillusionment can be severe. As I’ve argued, markets are not immune to this dynamic. An AI‑driven equity bubble implicitly depends on cheap, abundant energy; if that foundation cracks, the narrative of technological inevitability becomes vulnerable. South Korea, heavily dependent on Middle Eastern oil and deeply integrated into semiconductor and AI supply chains, may be the canary in the coal mine — the first major economy to feel the full systemic effects if the Iran war continues to escalate.
And this leads to the question Iran may be asking. What if prolonging the crisis into the U.S. midterms is there most strategic path? What if keeping the Strait of Hormuz closed — even at potentially enormous cost — is the surest way to impose political pressure on Washington? And what if, in the extreme case, Iran is willing to risk even a U.S. ground invasion because it has already gamed out that it can inflict heavy costs and longer term deny occupation especially of a US President who has long rejected such an approach? In that scenario, the crisis is not simply about oil or shipping lanes; it is about a regime that believes it can outlast American political time horizons. The risks here are profound — and any Weberian analysis must take seriously the possibility that the United States is confronting an actor whose strategic calculus is fundamentally different from its own. In summary, I am not saying at all that any of this is inevitable. The above account may prove incorrect. Unless you are actually in the crisis room of a regime you have no idea ultimately even of the overall picture. This could go many different ways all with very different market and political outcomes. All I am saying here is that any market participant who does not consider some of the issues just discussed is not fully enough reflecting on what are key counterfactuals. Many 30 something Wall Street types have no idea at this point of the above risks and as I keep suggesting there is a difference between paper (oil futures, financialization, etc.) and real (actual barrels of oil and shipping and refinery schedules).
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