What does the situation in the Gulf actually do?
More importantly: who suffers most if the Strait of Hormuz becomes difficult or impossible to pass?
It is tempting to assume that the answer is the West.
I don’t think it is.
It certainly is not the United States.
A disruption in Hormuz would create turbulence across global energy markets. The Gulf matters. Hormuz matters. Any disruption to one of the world’s major energy arteries will rattle prices, supply chains and financial markets.
But that is not the same thing as destroying the Western economy.
And Hormuz is not the only chokepoint that matters.
There is also Bab el-Mandeb, where Houthi attacks have already made passage considerably more difficult and expensive. Anyone looking at the world’s major shipping routes can see what these waterways represent.
They are the arteries of global trade.
And when those arteries become unreliable, something larger happens.
Globalisation itself becomes less attractive.
This matters because globalisation was built around a very specific economic proposition: manufacture where production is cheapest, ship the goods across the world, and sell them wherever demand exists.
It is an extraordinarily efficient system when shipping is cheap, predictable and secure.
Remove those assumptions, and the calculation changes.
Who depends most heavily on cheap manufacturing and uninterrupted exports?
China.
The implications are therefore rather obvious.
Chinese energy becomes more expensive.
Chinese exports become more expensive to transport.
Insurance costs rise. Routes become longer. Delivery becomes less predictable. Inventories become more expensive. The entire machinery of exporting enormous quantities of inexpensive goods to distant consumers begins to lose some of its economic advantage.
And China was already under pressure.
Its economy has structural problems. Its property sector has struggled. Demographics are becoming less favourable. Domestic demand has not simply replaced the extraordinary export-driven growth of earlier decades.
Now another burden is being added.
The irony is that the West may be better positioned to absorb it than many assume.
Because something else is happening at the same time.
The Western world is approaching reindustrialisation.
Not because politicians suddenly discovered the joys of factories, but because the economic assumptions behind extreme dependence on distant supply chains are changing.
Energy security matters.
Supply security matters.
Strategic manufacturing matters.
Resilience matters.
And once the cost of transporting something halfway around the world becomes high enough, producing it closer to home starts looking considerably less foolish.
Europe will be slower than the United States.
Europe is almost always slower.
But Europe has a peculiar historical habit of eventually doing what economic reality forces it to do.
That means the age of endlessly importing cheap manufactured goods may be approaching its limits.
The cheap stuff from China and elsewhere does not necessarily disappear.
It simply becomes harder to sell when its true logistical and strategic cost is finally included in the calculation.
And there is another effect.
Old economies need to rebuild.
When they do, they will initially use their own domestic markets to support that rebuilding. Factories will be reopened. Supply chains will be shortened. Infrastructure will be reconstructed. Capital will be redirected towards production closer to the consumer.
That process will not happen overnight.
But neither did globalisation.
The system we built over the past several decades is not a law of nature. It is an arrangement based on particular assumptions about energy, transport, security, labour costs and political stability.
Change those assumptions and the arrangement changes with them.
The war in and around the Gulf therefore has consequences that extend far beyond oil prices or shipping rates.
It may accelerate something already underway.
The gradual retreat from globalism.
And that may ultimately prove to be one of the most important consequences of the entire conflict.
Because wars do not merely destroy things.
Sometimes they destroy assumptions.
And the assumption that the world will always remain cheap, connected and safely accessible may be one of them.