Hormuz Strait Crisis Impacts Dollar System: Ray Dalio Warns Reserve Currency Status May Be Shaken

Gate News Report, March 17 — As tensions in the Middle East continue to escalate, control over the Strait of Hormuz has become a central issue in global financial risks. Ray Dalio, founder of Bridgewater Associates, pointed out that if the U.S. loses dominance over this critical shipping lane, the foundation of the U.S. dollar as the global reserve currency could face significant impact.

In his latest analysis, Dalio compares the current situation to the Suez Crisis, suggesting that weakening geopolitical control often signals an impending shakeup in the monetary system. He emphasized that if Iran maintains or threatens control of the passage, it could be seen as a sign of declining U.S. global influence, undermining the confidence of allies and creditors, and leading to a reevaluation of dollar-denominated assets.

Meanwhile, Balaji Srinivasan offers a more radical view, suggesting that if the conflict escalates to extreme levels, it could accelerate the collapse of the “petrodollar system” and trigger chain reactions in the global monetary order. Especially if energy trade settlement methods change, the dollar’s dominance may be challenged.

As a key node in global energy transportation, the Strait of Hormuz handles about 20% of the world’s oil trade. Reports indicate Iran has proposed allowing limited tanker passage, but only if settled in RMB, which is seen as a direct challenge to the dollar settlement system.

On the macroeconomic front, risks are also rising. Mark Zandi noted that before the conflict escalates, the probability of a recession is already close to 50%. Rising oil prices could become a critical trigger for economic downturns. Historical data shows that rapid oil price increases are often closely linked to turning points in the economic cycle.

Against this backdrop, the interconnected effects of geopolitics, energy markets, and the monetary system are strengthening. The situation in the Strait of Hormuz not only concerns regional security but could also have profound implications for the global financial landscape.