Petrodollar Under Siege: The Iran War’s Hidden Battlefield

The Iran war is exposing the fragility of U.S. financial dominance as the Strait of Hormuz turns into a geopolitical pressure point. Disruptions to oil flows are accelerating challenges to the petrodollar system and dollar supremacy. What looks like strategic leverage may ultimately prove a costly Pyrrhic victory.

Although the de-dollarisation process has already been started by the aforementioned organisations, the dollar still maintains its hold on the international economy. But in recent months, two major events have augmented the process of de-dollarisation, which include the US-China reciprocal tariff war and the ongoing US-Iran war. The former clarified the fact that the US no longer holds the cards to exploit others, with Beijing becoming a peer competitor of the US. The latter exposes the dollar’s vulnerabilities, paving the way towards a global financial transition, which can ultimately lead to a change in the current world order.

US Achilles’ Heel in the Hormuz

When the US and Israel started a full-scale war against Iran on 28 February 2026, they were of the view that targeting the top leadership of the Iranian administration and energy centres would result in regime change. And, if Iran tries to choke off the Strait of Hormuz, it will be recovered with minimum losses. However, this is not the case. Iran, under its Mosaic doctrine, is now inflicting heavy blows on Israel and on the American infrastructure in Gulf states. By completely blocking world trade, Iran is using the Strait as leverage and is using this as an opportunity to either end or make maximum dents in the American economic monopoly in........

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