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Strait of Hormuz closure world economy on a cliffs edge

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the US-Israeli war on Iran and the resulting effective closure of the Strait of Hormuz has triggered the largest energy supply disruption in history, pushing an already fragile world economy toward a deep slump. The central claim is that this crisis is not an accident of policy but an expression of the breakdown of the US-led world order, and that the attempt to weaken China and Russia through war is backfiring, strengthening both rivals while exposing the relative decline of US imperialism. The working class, however, will bear the costs.

Theoretical Grounding

The analysis is grounded in the Marxist theory of imperialism, specifically the Leninist understanding of interimperialist rivalry as the inevitable product of the uneven and combined development of capitalism. The article treats war not as a miscalculation by individual states but as a necessary expression of the breakdown of a hegemonic order — a concept that echoes Bukharin's analysis of imperialism as a system of competing national capitals. There is also an implicit reliance on the theory of overaccumulation: the crisis in the Gulf is not merely a geopolitical disruption but a shock that strikes an economy already "on thin ice," meaning the underlying contradictions of capital accumulation — falling profitability, swollen fictitious capital, and stagnant productive investment — have made the system acutely vulnerable to supply shocks. The article's treatment of the AI bubble as a sector "undermined" by the war connects directly to the Marxist critique of fictitious capital: the Gulf states' AI investments were themselves a speculative bubble built on cheap energy and cheap credit, now collapsing under the weight of real material disruption.

Conjunctural Relevance

The article is written in April 2026, during the first month of the US-Israeli war on Iran. It provides specific data points that ground the argument in the immediate conjuncture:

  • Oil markets: 20 million barrels per day normally pass through the Strait; the IEA has declared this "the largest supply disruption in history," exceeding the 1973 and 1979 crises combined. Brent crude rose 60% in four weeks.
  • Strategic reserves: The IEA released 400 million barrels — the largest ever — but this covers less than three weeks of normal Strait throughput.
  • Sanctions reversal: The US has lifted sanctions on both Russian and Iranian oil, a "stark admission of US imperialism's growing weakness."
  • Russia's windfall: Estimated $150 million per day in additional revenue from oil exports at market price.
  • Food crisis: The World Food Programme projects 45 million additional people pushed into acute hunger.
  • AI sector: South Korea's stock market lost $500 billion in the first week; Samsung and SK Hynix lost over 20% of their value. Gulf states are reassessing $3 trillion in pledged US investments.
  • Fertilizer: 30% drop in global supply, with a third of the world's nitrogen and phosphate previously passing through the Strait.

The article identifies China as weathering the storm due to stockpiling and continued Iranian oil shipments, while Russia is the "biggest winner." The US is portrayed as losing the war strategically, unable to achieve its goal of weakening China and forced into concessions that reveal its declining relative power.

Where the Argument Continues

The article leaves several threads open for further development:

  • The internal dynamics of US imperialism: The article asserts that the war is an "accident expressing the necessity of the breakdown" of the US-led order, but does not explore the domestic economic and political pressures — the crisis of overaccumulation, the fragility of the US financial system, the political crisis of the Trump administration — that drove the decision to escalate.
  • The response of the working class: The article concludes with the necessity of socialist revolution but does not examine the actual state of working-class organisation, consciousness, or struggle in the affected regions or globally.
  • The trajectory of the war: Written in the first month, the article cannot assess how the conflict will develop militarily or economically. The RCI's ongoing coverage — in subsequent IDOM articles and Against the Stream episodes — would be the natural place to track this.
  • The role of China and Russia as imperialist powers: The article treats them as competitors to US imperialism but does not develop a full analysis of their own imperialist dynamics, contradictions, or relations with the global South.

Connections

This article should be read alongside:

  • Lenin, Imperialism, the Highest Stage of Capitalism — for the theoretical framework of interimperialist rivalry and the export of capital.
  • Bukharin, Imperialism and World Economy — for the analysis of the world economy as a system of competing national capitals.
  • IDOM articles on the Ukraine war — the 2022 proxy war between NATO and Russia is the direct precedent for the sanctions dynamics and energy crisis described here.
  • IDOM analyses of the AI bubble — the article's treatment of AI as a sector of fictitious capital vulnerable to material disruption connects to broader Marxist critiques of the "tech economy."
  • Against the Stream episodes from April-May 2026 — likely to provide updated military and economic analysis as the war develops.
  • Marx, Capital Volume 3, Part 3 — on the tendency of the rate of profit to fall and the role of raw materials crises in precipitating general crises.

Key Quotes

  1. "The US-Israeli war on Iran and the subsequent closure of the Strait of Hormuz have created a crisis in the world economy and further exposed the fault lines between US imperialism and its Russian and Chinese competitors."

  2. "The International Energy Agency (IEA) declared this 'the largest supply disruption in the history of the global oil market,' bigger than the 1973 and 1979 oil crises combined."

  3. "The US imperialists launched this war in part to weaken China by cutting it off from Iranian energy. But their maneuver is backfiring."

  4. "The lifting of sanctions on Russia and Iran are a stark admission of US imperialism's growing weakness relative to China and Russia."

  5. "The US-Israeli war against Iran is an accident expressing the necessity of the breakdown in the US-led world order."

  6. "Trump and US imperialism will lose this war, but the biggest loser will be the working class, who will be forced to pay for the mounting crisis."