Most analyses of potential US escalation against Iran in the Gulf remain confined to deterrence logic and regional balances of power. The debate often focuses on credibility, retaliation, and red lines. Yet such framing misses a deeper structural reality. When viewed through the lens of classical international relations theory, a Gulf crisis is not merely a bilateral confrontation. It is a stress test for the global industrial system.

Kenneth Waltz, in Man, the State, and War (1959), argued that conflict can be understood through three “images”: the individual, the state, and the international system. Applying this framework to the current US–Iran dynamic reveals that the most consequential risks lie not at the level of personalities or even state rivalry, but at the systemic level.

At the first image, leadership behaviour matters. Donald Trump’s political style has historically combined transactional bargaining with strategic brinkmanship. Escalation, or the credible threat of it, can function as political signalling both externally and domestically. In this sense, tension in the Gulf may serve as a mechanism for projecting resolve or recalibrating negotiations.

However, escalation at the individual level does not necessarily imply a desire for full-scale war. It often reflects controlled risk-taking raising pressure without crossing the threshold into uncontrollable conflict. Yet even calibrated escalation operates within broader constraints that individual actors do not fully control.

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At the second image, the structural rivalry between Washington and Beijing becomes central. The United States remains engaged in a long-term economic and technological competition with China. Energy flows are part of that equation.

Roughly 83 percent of Middle Eastern crude exports flow to four Asian economies: China, India, Japan, and South Korea. China alone is deeply reliant on Gulf producers for its imported oil. From a narrow state-centric perspective, instability in the Strait of Hormuz could be interpreted as a pressure point against Beijing’s economic backbone.

Within this logic, energy chokepoints appear as strategic leverage. Disruption could raise costs for China, complicate industrial output, and inject uncertainty into supply chains. Seen purely through the prism of state competition, this might appear tactically rational.

But this reasoning collapses at the third image.

At the systemic level, the logic changes entirely. The international system today is not only defined by polarity but by dense interdependence. Energy chokepoints no longer produce contained regional crises; they generate global reverberations.

The Strait of Hormuz handles roughly one-fifth of global oil trade and a significant share of LNG exports, particularly from Qatar. According to a June 2025 analysis by the Institute for Energy Economics and Financial Analysis (IEEFA), approximately 10 per cent of Europe’s LNG imports originate from Qatar and the UAE and transit through Hormuz. Italy, Belgium, and Poland are among the primary recipients, with Italy accounting for nearly half of these Gulf LNG volumes.

At first glance, 10 per cent may appear manageable. But this figure reflects only direct LNG imports from those Gulf suppliers. It does not capture the broader market dynamics that would unfold in the event of disruption.

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Around 82 percent of Qatar’s LNG exports flow to Asian buyers. Should Hormuz face instability, Asian importers China, Japan, South Korea, and India would aggressively compete for alternative cargoes. The LNG market is globally integrated and price-sensitive. Europe, having reduced reliance on Russian pipeline gas, remains structurally dependent on LNG imports to stabilise supply and maintain storage levels.

The International Energy Agency’s 2025 gas market outlook underscored the continued importance of LNG for European energy security. Even if direct Gulf exposure appears limited in percentage terms, price amplification would transmit rapidly across European markets.

The systemic risk is therefore not simply volume loss but price contagion.

An energy shock in the Gulf would ripple beyond fuel markets. Germany’s industrial core, Italy’s processing sectors, and Eastern European manufacturing remain sensitive to energy volatility. The 2022–2023 crisis demonstrated how quickly gas price spikes translate into inflation, fiscal pressure, and industrial slowdown.

Moreover, the four primary recipients of Middle Eastern oil China, India, Japan, and South Korea form a substantial share of global manufacturing output. From electronics to machinery and intermediate goods, their production feeds global supply chains. Disruption in energy flows to these economies would not remain confined to Asia it would cascade through global trade networks.

Moreover, the four primary recipients of Middle Eastern oil China, India, Japan, and South Korea form a substantial share of global manufacturing output. From electronics to machinery and intermediate goods, their production feeds global supply chains. Disruption in energy flows to these economies would not remain confined to Asia it would cascade through global trade networks.

Even limited escalation carries systemic consequences. Insurance premiums for tankers would rise. Risk perception alone could push oil and gas benchmarks upward. Markets react not only to physical shortages but to credible threats.

Iranian officials have repeatedly warned that destabilisation of Iran would destabilise the region.

Whether through direct disruption or elevated risk premiums, Hormuz functions as a strategic lever. Yet the broader implication is often overlooked: in a tightly interconnected industrial world, leverage cuts both ways.

Whether through direct disruption or elevated risk premiums, Hormuz functions as a strategic lever. Yet the broader implication is often overlooked: in a tightly interconnected industrial world, leverage cuts both ways.

A strategy that appears tactically rational at the state level applying pressure through energy vulnerability may prove strategically self-defeating at the systemic level. Europe, still navigating the aftershocks of its energy decoupling from Russia, would face renewed inflationary pressure. Asian manufacturing hubs would confront cost spikes. Supply chains would tighten.

The ultimate paradox is this: escalation intended to pressure a rival could end up destabilising the very industrial core upon which global economic stability depends.

The ultimate paradox is this: escalation intended to pressure a rival could end up destabilising the very industrial core upon which global economic stability depends.

Waltz’s framework reminds us that while leaders act and states compete, structure constrains outcomes. In 2026, that structure is defined by industrial interdependence and energy vulnerability. A crisis in the Strait of Hormuz would therefore not merely test US–Iran deterrence.

It would test the resilience of the global system itself.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.

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