In Biblical lore, Samson, facing certain doom, toppled the temple pillars, killing himself and his enemies in one final act of defiance. Fast-forward to 2025, and Iran might wield a modern equivalent: not nukes, but control over the Strait of Hormuz. As tensions simmer post the June 2025 Israel-Iran war, a 12-day clash that rattled global markets, analysts warn of escalation risks by late August or December. With Iran reeling but defiant, a full-scale confrontation could see Tehran disrupt 20% of the world's oil supply, spiking prices, detonating derivatives markets, and plunging the globe into depression. Drawing from Warren Buffett's "financial weapons of mass destruction" warning, this blog piece explores if Iran could indeed trigger such chaos, and why it might fall flat or boomerang.
The June 2025 Israel-Iran war, dubbed the Twelve-Day War, marked a direct clash amid the Gaza conflict, with Israeli strikes on Iranian nuclear sites and retaliatory missiles. A fragile ceasefire holds, but Iran vows stronger counter strike against US and Israeli assets. Recent updates show Iran protecting nuclear scientists and bolstering Hezbollah, signalling preparation for round two. Foreign Policy predicts Israel may strike again before December, possibly August, to thwart Iran's nuclear ambitions under a potential Trump return. Tehran, at a crossroads between defiance and diplomacy, leans toward talks but warns of uncontrollable consequences if provoked.
On X, users frame this as Iran's "Samson Option": closing Hormuz to ruin enemies, even at self-cost. One post warns of US $400/barrel oil and global market disruption if Iran acts. Iran's parliament has already voted to block the strait in response to US involvement, echoing real threats.
This narrow chokepoint, just 3.2 km wide at its slimmest, funnels 20 million barrels of oil daily, 20% of global production, and 20% of LNG exports from Saudi Arabia, UAE, Iraq, Kuwait, Qatar, and Iran itself. No alternatives exist; it's the Persian Gulf's sole ocean gateway. Iran, leveraging asymmetric warfare, mines, submarines, missiles, could shut it down via swarming attacks, as Pentagon simulations suggest US forces might withdraw to avoid annihilation. Reopening could take weeks, if possible, while Iran targets Gulf infrastructure, crippling exports long-term.
A closure would devastate Asia hardest, China, Japan, India rely heavily on Gulf energy, spiking shipping costs, inflation, and halting trade. For the US, gas prices could jump 30-50%, fuelling recession. X discussions highlight this as economic suicide for Iran (90% of its oil exports pass through), but a desperate equaliser.
Past crises pale: 1973's 9% supply loss quadrupled prices; 1979's 6% tripled them; 1990's 7% doubled. A 20% Hormuz blackout? Conservative estimates peg oil at $275/barrel, but some fear $400+ amid frenzy. Unlike printable money fixes for financial crashes, central banks can't conjure oil, US/Russia ramps couldn't offset 20 million barrels fast enough. Global demand, projected at 100 million barrels/day, would face chaos, with inflation surging and economies grinding to a halt.
In 2025, oil markets are already turbulent: Brent forecasts at $66/barrel average, but volatility ties to trade tensions and supply dynamics. A Hormuz closure would amplify this, disrupting futures and ETFs.
Buffett's 2002 warning rings true: derivatives, futures, options, swaps on oil, rates, currencies, are a $55 trillion market in 2025, interconnected via banks and funds. Airlines hedge fuel; speculators bet big. A price surge triggers losses, margin calls, liquidity crunches, forced sales, cascading defaults. Opaque exposures breed panic: who holds the hot potato? This "domino effect" could dwarf 2008, as physical shortages compound financial fragility. X posts call it Iran's "financial WMD," potentially causing depression.
Iran's leverage deters regime change since 1979, but US-Israel may call the bluff, betting on short disruptions. History shows brief chokepoints; US production could surge, and alternatives like pipelines mitigate. For Iran, self-harm is acute, ruining its economy and inviting invasion. Yet, asymmetric tactics make closure feasible, and desperation could prevail.
Global backlash: EU sees limited direct hit but political turmoil; all suffer inflation. UN warns of uncontrollable fire.
Iran could trigger collapse via Hormuz, its Samson pull, detonating oil shocks and derivatives bombs in a war's next phase. But like Samson, it risks self-destruction, amid fragile peace. Diplomacy beckons, yet escalation looms. In our interconnected world, one nation's defiance could temple-crash us all.
https://www.investing.com/analysis/how-iran-could-trigger-a-global-economic-collapse-200665210