The strait of no return

Business Recorder

3 days ago

When US intelligence revealed that Iran had loaded sea mines near the Strait of Hormuz on July 1, it sent an unmistakable message to the West: Tehran is not backing down after US and Israeli airstrikes devastated its nuclear facilities.
Although the Strait remains open, the mere threat of closure is enough to send ripples across global markets. The conflict might appear as yet another Middle Eastern flashpoint, but the trickle-down effects are going to be much worse. Asia's largest economies – China, India, Japan, and South Korea – stand dangerously exposed.
Around 80% of their Middle Eastern oil passes through the Strait, an artery vital to global trade. Even a short disruption would send economic shockwaves beyond Tehran, Washington, or Tel Aviv.
Vice President JD Vance recently pronounced the 'Trump Doctrine' in Ohio, redefining American foreign policy. The new doctrine prioritizes aggressive diplomacy and, if necessary, deploying overwhelming military force followed by a swift withdrawal.
Iran's recent defiance near the Strait of Hormuz is already putting the Trump Doctrine on trial, testing how far Washington will go to enforce its red lines. Earlier, Trump demonstrated a tough stance, ordering airstrikes on Iran's nuclear sites, offering the first glimpse of how this doctrine might unfold. Yet, despite US escalation, CIA analyses indicate the Iranian nuclear programme was set back only a few months; not years, as Trump had claimed.
The Pentagon, however, has shown prudence. Defense Secretary Pete Hegseth echoed Trump's optimism, whereas General Dan Caine, chairman of the Joint Chiefs, noted cautiously that 'all three sites sustained extremely severe damage and destruction,' though he stopped short of confirming the end of Iran's nuclear ambitions. Tehran retaliated by expelling UN nuclear inspectors, heightening fears of a renewed nuclear drive.
Trump's foreign policy does not operate in isolation however. His aggressive stance abroad corresponds closely with domestic priorities articulated in the new 'Big Beautiful Bill,' a fiscal package designed to operationalize his doctrine by reinforcing energy independence and bolstering defense production, at the expense of domestic welfare.
After overcoming resistance from Republican hardliners, the bill also includes $4.5 trillion tax cut, substantial hikes in defense spending, and dramatic increases in border security funding, offset by over $1 trillion in cuts from Medicaid and reductions in food assistance for low-income Americans.
This strategy seems politically calculated: reassuring Trump's MAGA (Make America Great Again) base amid sliding poll numbers by projecting decisiveness abroad and economic insulation at home. Yet, such insulation remains a luxury Asia cannot afford.
The implications extend far beyond Iran. Trump's new doctrine has alarmed other countries, especially those non-signatories to the Nuclear Non-Proliferation Treaty (NPT). Iran, despite being an NPT signatory, braved intense punishment, prompting justified caution in countries like Pakistan, a declared nuclear power outside the NPT framework.
Recently questioned about potential threats against Pakistan's nuclear facilities, Pakistan's military spokesperson Lt. Gen. Ahmed Sharif Chaudhry firmly dismissed the possibility, stating unequivocally, 'There is absolutely no concern whatsoever in the military that Pakistan can become the next target.' He further warned that any attempt against nuclear-armed Pakistan would have 'horrific consequences.'
Islamabad's cautious yet active diplomacy stems from strategic necessity, heightened by recent events. Only in January 2024, Pakistan and Iran exchanged missile fire across their shared 905-kilometer border, each accusing the other of harboring militant groups. But geopolitical tides shift swiftly; the sudden eruption of simultaneous regional crises, including Pakistan's conflict with India in May and the recent Israel-Iran hostilities, has unexpectedly brought Tehran and Islamabad closer than ever.
Following the devastating Israeli strikes on Iran's nuclear sites, Pakistan swiftly condemned the aggression, calling it a violation of Iran's sovereignty and urging the UN to intervene. Foreign Minister Ishaq Dar publicly signaled Islamabad's willingness to facilitate negotiations, conveying Iran's openness to dialogue should Israeli hostilities cease. Although past mistrust, especially concerning border security and separatist sanctuaries, hasn't vanished overnight, the current environment of heightened tensions has created strategic congruence between these uneasy neighbors.
Despite these tensions, it is pertinent to note that Pakistan's imports from Iran grew by 18% last fiscal year, indicating resilient economic ties between the two nations. According to Pakistan's Ministry of Commerce, imports from Iran reached $66 million in June 2025 alone, maintaining steady trade through geopolitical disruptions.
Critical land routes, especially the Taftan border crossing, remain operational, essential for sustaining these imports. Total imports from Iran reached $1.222 billion from July 2024 to June 2025, reflecting growing demand for energy supplies, fertilizers, construction materials, and agricultural staples sourced from Iran.
Experts highlight that energy imports, mainly refined petroleum and natural gas, account for over 40% of this trade. If Trump, under his renewed doctrine, deals with a heavy hand towards Iran, the resulting regional crisis can jeopardize not just Pakistan's energy security, but the stability of other Asian countries too.
For China, a Hormuz closure would pose an immediate economic threat; around 90% of Iran's oil exports, over five million barrels a day, transit via Hormuz. Senator Marco Rubio, sensing the potential fallout in June, urged Beijing to persuade Tehran directly against closure, highlighting severe consequences for China's economy. Such vulnerability emerges at a moment when China's economic recovery remains fragile and Beijing is increasingly wary of Trump's unpredictable military assertiveness, especially following recent US actions in Iran and implicit warnings towards Taiwan.
India also walks a tightrope. Despite diversifying energy sources from the US, Russia, and elsewhere, India still relies heavily on Middle Eastern oil, with approximately 35% passing through Hormuz. As energy analyst Vibhuti Garg notes, India remains critically tethered to fossil fuels. Closure of the Strait of Hormuz by Iran in retaliation could trigger inflation precisely when India's economy is recovering from recent shocks.
Japan and South Korea import over 80% of their energy from abroad; they face even greater risks. Nearly 75% of Japan's oil and 70% of South Korea's crude transit Hormuz, according to France 24. South Korea's renewable energy share remains low at 9%, significantly behind the OECD's 33% average, leaving it especially vulnerable. Any disruption in Hormuz could rapidly choke manufacturing output and escalate consumer prices, dealing severe blows to these two major Asian economies.
Trump's latest bill appears to reinvigorate his electoral base, although it would come at substantial political and geopolitical costs. Days after the strikes, Trump's approval ratings dropped to 44%, reflecting Americans' skepticism over US involvement in another Middle Eastern conflict. The administration's tough stance on Iran – backed by record defense spending – caters to voters who are hungry for strength abroad but wary of another endless war.
While Tehran has historically issued threats to block the Strait of Hormuz, recent parliamentary support to block the strait have posed a real risk, albeit symbolic. Experts like Edward L. Morse of Hartree Partners suggest the threat is overstated given Iran's own economic dependence on open shipping lanes. Nevertheless, even symbolic actions dramatically raise the risk of miscalculation.
Ultimately, Trump's muscular approach risks triggering instability he claims to prevent, potentially forcing nuclear-armed non-NPT states like Pakistan into defensive postures, further complicating global security.
The Trump Doctrine favors swift strikes and rapid withdrawals, but the Strait of Hormuz cannot be so easily attacked without mitigating the consequences. Asia, heavily dependent on Middle Eastern oil, now faces potential economic turmoil; collateral damage from a geopolitical gamble that has, even before full escalation, already gone too far.
(The writer is an educationist and an economist)
Copyright Business Recorder, 2025