When the United States and Israel launched large-scale airstrikes against Iran in late February, Washington's political narrative was straightforward: The strikes were a necessary and decisive military operation aimed at dismantling Iran's nuclear program, degrading its military capabilities, and establishing a new security order in the Middle East.
By the third week of the conflict, however, a reality that could no longer be ignored had taken shape. The war had not stayed on the battlefield. It had spread rapidly into global energy and financial markets.
What is emerging from this conflict is a distinct form of warfare — one that can be described as "marketized war." While military force still matters, the strategic outcomes are increasingly determined by oil prices, shipping insurance rates, and supply chain disruptions.
The Illusion of Military Advantage
By conventional military measures, the United States achieved early results. The Trump administration and the Pentagon reported that Iran's air defense systems, air force, and most of its naval capacity had been severely degraded within days. Iran's missile and drone strike capabilities reportedly fell by more than 90%. Some 50,000 U.S. troops were deployed across the region, reinforced by Marine units and carrier strike groups to maintain air and sea dominance.
Yet, those military gains did not neutralize Iran's most consequential capability: asymmetric warfare.
Outmatched in conventional terms, Iran shifted its operations away from the traditional battlefield and toward the most vulnerable nodes of the global economy. That strategic pivot transformed a military engagement into a global economic crisis.
The Strait of Hormuz: A Global Chokepoint
The strategic focal point of this vulnerability is the Strait of Hormuz, one of the world's most critical energy chokepoints. According to the International Energy Agency and the U.S. Energy Information Administration, approximately 20 million barrels of oil pass through the strait each day — roughly 20% of all seaborne oil trade worldwide.
At its narrowest, the waterway is only a few dozen miles wide. That geography means even limited military action can generate outsized economic consequences.
After the outbreak of the conflict, Iran began deploying drones, missiles, and sea mines against tankers and port facilities. By the third week, at least 16 commercial vessels and oil tankers had been attacked or harassed in the Persian Gulf and around the strait. Shipping insurance premiums surged, several major carriers suspended transits, and oil prices moved rapidly toward $100 per barrel.
Iran's objective was not a full physical blockade, but the sustained manufacture of uncertainty. Once perceived risk rises past a certain threshold, shipping effectively halts even if the lane remains technically open. This psychological blockade often proves more effective than a physical one.
The Strategic Logic of 'Marketized War'
Iran's approach reflects a broader strategic logic used by weaker powers. In a highly globalized economy, warfare extends beyond the military domain into market structures. Energy prices, shipping insurance, supply chains, and financial markets can all be converted into strategic instruments.
Scholars of geoeconomics refer to this as "weaponized interdependence" — the exploitation of asymmetric vulnerabilities within networks of mutual economic reliance. A militarily weaker state can impose significant pressure on a stronger adversary simply by disrupting critical nodes.
The Strait of Hormuz illustrates this perfectly. In that narrow channel, a single fast boat, a shore-based missile, or a sea mine can pose a lethal threat to a large tanker. Even with overwhelming air and naval superiority, the United States cannot fully eliminate that risk. As long as markets believe the passage is unsafe, global energy prices will respond accordingly.
Under these conditions, Iran does not need to defeat the U.S. military. It only needs to keep the market afraid.
Diplomatic Isolation and Unintended Beneficiaries
As the Hormuz crisis intensified, the Trump administration called on China, the United Kingdom, France, Japan, and South Korea to contribute naval escorts. The responses were uniformly cautious.
Britain stated the priority should be de-escalation. Japan cited constitutional constraints on military involvement. South Korea indicated it would maintain communication with Washington, while China called for a cease-fire. Collectively, these replies conveyed an uncomfortable message: Most countries were unwilling to treat this as their war.
Historically, successful military campaigns have been built on broad coalitions — such as the 1991 Gulf War or the 2014 campaign against the Islamic State group. In each case, diplomatic architecture preceded military action. In this conflict, the sequence was reversed: Strike first, seek allies afterward. That inversion left the United States diplomatically exposed by the third week of fighting.
Viewed through a wider strategic lens, the principal beneficiaries of this conflict may not be found in the Middle East at all. Russia gains from higher oil export revenues and from renewed Western distraction in the Middle East, relieving pressure on the Ukraine front. China has positioned itself as a neutral party calling for restraint, while watching the U.S. become entangled once again in a regional conflict.
Meanwhile, Iran, even with its military capabilities severely damaged, retains the ability to sustain uncertainty in the Strait of Hormuz and thereby continue influencing global energy markets. In this war, the decisive factor is not which side has destroyed more military assets, but which side has more effectively shaped market expectations.
A 21st-Century Cuban Missile Crisis
The 1962 Cuban Missile Crisis brought the world to the edge of nuclear war, and the standoff between Washington and Moscow remains the most dangerous moment of the Cold War. The Strait of Hormuz today carries a structurally similar weight, but the weapon is not a nuclear warhead. It is the energy supply chain.
In an era of deep global integration, energy and logistics networks have themselves become instruments of strategic coercion. When tankers cannot pass safely, the consequences extend far beyond any localized military exchange.
The Iran conflict may eventually end in some form of a cease-fire. Whatever the outcome, it has already exposed a fundamental truth about how war operates in the 21st century: In a deeply interdependent global economy, the market has become a battlefield in its own right.
This is the central paradox of marketized war: One side may win the military campaign while losing the strategic contest, making victory difficult to define. Ultimately, this conflict may well be remembered as a warning that in the age of globalization, no country can truly win a war that destroys the markets on which the world depends.
* The author is Dean of the College of Management at Shih Hsin University. （Related： China Pushes Back Against US Tariffs and Trade Probes During Paris Talks ｜ Latest ）
