Transcription
Something is happening in the Persian Gulf right now that most people are not paying close enough attention to. The Strait of Hormuz has been a pressure point in global geopolitics for decades. But what most analysts miss is that this is not simply a shipping lane dispute. It is the single most important geographic choke point on the planet. And if the current crisis escalates, the consequences will reach every country on earth, including yours.
I am Professor Jang Shaqin, and today we are going to do something that most commentators refuse to do. We are going to think through this systematically. We're going to use game theory to map out exactly three scenarios of how a Hormuz escalation plays out, what each side gains and loses, and what the world looks like on the other side of this crisis. By the end of this video, you will understand this situation better than most people watching the news right now.
I've spent months researching what's coming between 2026 and 2030 and I put it all into an ebook called "The Next Global Shift: How to Stay Ahead of Economic Collapse and War." The economies, the conflicts, the moves you need to make. If you want my ebook, link in the caption and comment section. Let's get into the video.
First, we need to establish the foundation. Look at this map. This area right here, the Strait of Hormuz. It is approximately 33 km wide at its narrowest point. That is narrow enough that you could almost see the other side on a clear day. Now, here's what flows through that 33 km gap. Roughly 20% of the entire world's oil supply. Every single day, around 17 to 21 million barrels of oil pass through this strait. Where does it go? It goes to Japan, South Korea, China, and India. Japan depends on this strait for about 75% of its oil imports. China depends on it for roughly 40%. India 60%. If this strait closes, these economies do not slow down. They stop.
But oil is only part of the story. What flows in the other direction is food and goods. The GCC nations, the Gulf States, import up to 80% of their food. That food comes in through this same maritime corridor. So if the strait closes, you do not just get an energy crisis. You get a food crisis inside the wealthiest nations in the Middle East. You get a cascading economic collapse that spreads to Asia and then that collapse spreads to the rest of the world. This is why the Strait of Hormuz is not a regional problem. It is a global problem. And this is why Iran has kept control of the strait as its single most powerful strategic card for the past 40 years. The question we need to answer today is this: What happens when that card gets played?
The first scenario is what I call control disruption. In this scenario, Iran does not fully close the strait. Instead, it uses a combination of drone attacks, missile strikes. Think about what this looks like in practice. Iran produces Shahed class drones at a rate of roughly 500 per day. Each one costs between $35,000 and $50,000 to manufacture. You do not need to sink a super tanker to cause a crisis. You just need to attack one every two weeks. Because the moment you attack one super tanker, shipping insurance rates for the entire Gulf go through the roof. Shipping companies start rerouting. Oil companies start hedging. Oil prices spike 30%, 40%, maybe 50% in weeks.
Now, here's the game theory. In this scenario, Iran gets enormous leverage at very low cost. The GCC states begin to bleed economically without Iran having to commit to a full-scale war. The United States is forced to spend billions deploying naval assets, carrier groups, and air defense systems, all to protect shipping lanes that Iran is not even fully attacking yet. It is a war of attrition before the real war even starts. Who wins in this scenario? Iran in the short term. But here's the trap. Once you start this, you cannot easily stop it. Every escalation invites a counter-escalation.
The United States does not have good options here. Their Patriot missile systems cost $1 million per interceptor missile. Their THAAD batteries are large, slow, and visible. When Iran fires a $50,000 drone and the United States spends $1 million to intercept it, that is a 20 to 1 cost ratio working in Iran's favor. Iran can sustain that math far longer than the United States Treasury can absorb it. The key indicator to watch in this scenario is the oil price. If Brent crude goes above $120 per barrel and stays there, you are watching scenario one play out in real time. At that point, every government in Asia is under severe economic pressure. Every government in Europe is making difficult choices. And the United States is being pulled into a conflict it did not fully plan for.
The second scenario is the one that keeps economists awake at night. Iran decides to fully close the Strait of Hormuz. How does Iran actually close the strait? There are several mechanisms. They can deploy naval mines. The strait is shallow enough that mines are extremely effective and nearly impossible to clear quickly under fire. They can use land-based anti-ship missiles positioned in the mountains of southern Iran, which gives them perfect elevated firing positions directly into the strait. They can combine fast attack boats with drone saturation to make the passage genuinely too dangerous for any commercial vessel to attempt.
Now, let us think through what this triggers immediately. Day one, oil futures spike to levels the world has not seen since the 1973 oil embargo. We are talking $200, possibly $250 per barrel within days of a confirmed closure. Week one, Japan, South Korea, and Taiwan activate emergency rationing protocols. These are export-driven economies. Their factories begin slowing down because energy costs have become unworkable at this price level. Week two, China faces a decision it does not want to make. China gets roughly 40% of its oil through Hormuz. China maintains strategic petroleum reserves, but those reserves cover approximately 90 days of consumption under normal conditions. So, China has a three-month window before the situation becomes an existential economic crisis for the Chinese government.
Now, here is a critical game theory point. China is the wild card in this scenario. China has significant economic and political influence over Iran. China is also the largest buyer of Iranian oil. If the strait closes, China loses as much as Iran gains in political leverage. So, China has every incentive to pressure Iran privately to reopen the strait. But China also has every incentive to use this crisis as leverage against the United States on other fronts. This is what makes scenario two so dangerous. You now have four major powers with conflicting interests, all converging on one 33 km strip of water. The United States wants it open. Iran wants it closed. China wants it open for its economy, but wants to exploit the crisis politically. Russia is watching and calculating how a destabilized global oil market benefits its own energy exports to Europe. Nobody is actually in control of how this ends.
The economic damage in this scenario is severe and fast. The GCC states cannot survive a prolonged closure. The UAE imports 80% of its food. Its desalination plants run on electricity. Its electricity comes from natural gas. Disrupt that supply chain at any point and you're looking at a humanitarian crisis inside some of the wettest cities in the world within weeks. Dubai does not die slowly in this scenario. It dies very fast. The indicator to watch for scenario two is whether commercial shipping insurers issue what is called a war risk exclusion for the Persian Gulf. The moment that happens, no commercial vessel will enter the strait voluntarily. The closure becomes self-enforcing without Iran having to fire a single additional shot.
The third scenario is the one that nobody wants to say out loud. Full regional escalation with great power involvement. In this scenario, the United States concludes that it cannot allow the strait to remain closed. It cannot allow Iran to permanently control the most important shipping lane on the planet. So, it commits to military force to reopen the strait and eliminate Iran's ability to threaten it again. What does that actually require? Here is the honest analysis. Air power alone cannot defeat Iran. The Iranian military doctrine is specifically designed to survive sustained air campaigns. Their missile systems, drone production facilities, and command and control networks are all dispersed and buried in mountain terrain. You can bomb Iran for months and they keep fighting. We saw this logic play out in Vietnam. We saw it in Iraq. Bombing a country that has decided it will not surrender does not end the war. It makes the war longer and more expensive.
To neutralize Iran's ability to close the strait on a permanent basis, you need ground forces. That is the military reality. Estimates suggest you would need somewhere between 500,000 and 2 million soldiers to occupy and pacify a country of 86 million people spread across mountainous terrain. The United States military as it currently exists is not sized or structured for that mission. But here is where this scenario gets truly dangerous. If the United States commits to a ground war in Iran, Russia cannot allow Iran to fall. If Iran falls, Russia's southern strategic flank becomes exposed. China cannot allow a precedent where the United States can forcibly change the government of any nation that defies its economic order. So both Russia and China begin providing Iran with advanced weapons, intelligence, and diplomatic cover at the United Nations. And Europe, already under enormous economic pressure from the energy crisis created by the strait closure, faces a choice. Does it join the United States in a war it cannot really afford against an opponent it cannot easily defeat? Or does it look for a negotiated exit that breaks with Washington?
The nuclear dimension in scenario three is what makes it genuinely existential. Western intelligence assessments have placed Iran weeks away from weapons-grade enrichment capacity for years. If Iran concludes that it faces total destruction as a functioning state, the calculation around those capabilities changes completely, not because Iran necessarily wants to use them, but because the threat of using them becomes the only remaining leverage they have. This is a classic game theory problem. When a rational actor faces total loss, options that seemed irrational suddenly become rational. That is what makes scenario three unpredictable and genuinely dangerous in a way that the first two scenarios are not.
So where does this leave us? The key insight from all three scenarios is this. The Strait of Hormuz crisis is not really about Iran and the United States. It is about what happens to the global economic system when the single most important energy corridor in the world becomes a battlefield. The United States built its entire global financial architecture on the petrodollar. The GCC sells oil in US dollars. Those dollars get recycled back into American financial markets. That is the engine that keeps the US dollar as the world reserve currency. Destroy the GCC's ability to function and you start dismantling that entire system from the outside. Iran understands this. That is why the strait is their most powerful weapon. Not missiles, not drones, the strait itself.
Here is what to watch in the coming weeks. First, oil prices. If they stay elevated above $120 per barrel, the global economy is already in serious trouble. Second, watch the shipping insurance markets. War risk exclusions in the Gulf are your early warning signal for scenario two. Third, watch China. China's public statements about this conflict will tell you more than any military movement. If China starts calling loudly for de-escalation, they are scared. If China stays quiet, they are calculating their next move.
We will continue this analysis as the situation develops. Each scenario has its own internal logic and its own set of indicators. And as events unfold in real time, we will test our framework against what actually happens. If this kind of structural analysis is what you are looking for, subscribe and hit the notification bell because the next few months may be the most consequential period in global geopolitics in decades. And you want to understand what is actually happening and why. This is the video today. If you want my ebook, link in the description.