‘US risks losing war if...’: Ray Dalio’s big Strait of Hormuz warning amid raging Iran conflict

Dalio concluded that the conflict is heading toward a decisive phase, with the outcome likely to reshape global power dynamics, financial markets, and geopolitical alliances

• Dalio: Strait of Hormuz control key in US-Iran conflict
• Iran controlling the strait may harm US influence and global stability.
• Dalio: Outcome could reshape global power, markets, alliances

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Ray Dalio has issued a stark warning on the ongoing US-Iran conflict, saying control of the Strait of Hormuz - not oil prices - will ultimately determine the outcome of the war and the future of the global order.

In a detailed post on X, Dalio, founder of Bridgewater Associates and one of the world's most prominent hedge fund investors, said, "If Iran is left with control over who can pass through the Strait of Hormuz, or is even left with the power to negotiate… The United States will be judged to have lost the war, and Iran will be judged to have won."

He warned that Iran using the strait as leverage would signal a major failure of American power. "The consequences of allowing Iran to shut down the most important strait in the world, through which the right of passage must be ensured at all costs, would be hugely damaging to the United States, its allies in the region (especially its Gulf allies), countries that depend most on its oil flow, the world economy, and the world order," Dalio said.

Drawing parallels with past empires, Dalio cautioned that a US failure could mirror historic turning points such as the decline of Britain. He said, "Watch out for allies and creditors losing confidence, the loss of its reserve currency status, the selling of its debt assets, and the weakening of its currency, especially relative to gold."

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On the flip side, demonstrating strength would reinforce US dominance. "When the world's dominant power demonstrates its military and financial strength, that bolsters confidence in it and the willingness to hold its debt and currency," he added.

Dalio also warned of the geopolitical fallout if Iran gains leverage over the waterway. "If, on the other hand, the Strait of Hormuz is left in the hands of the Iranians to use as a weapon to threaten American allies in the Gulf and the world economy more broadly, everyone will be hostage to the Iranians," he said, adding that Donald Trump would be "perceived to have picked a fight and lost."

He stressed that securing the strait would be difficult without broader support. "It will be very difficult for the United States and Israel alone to ensure the safe passage of ships without prying Hormuz loose from Iranian control, and it will likely require a great battle to do so," Dalio said.

Highlighting the asymmetry in stakes, he noted, "They are willing to die as a demonstrated willingness to die is essential for one's self-respect and showing the devotion that brings about the greatest reward-while Americans are worrying about high gas prices and America's leaders are worrying about midterm elections."

Dalio concluded that the conflict is heading toward a decisive phase, with the outcome likely to reshape global power dynamics, financial markets, and geopolitical alliances.