Hormuz as a Lever: The Dialectic of Power and the Embodiment of Eurasian Order How Iran is positioning itself as a strategic infrastructure for the emerging Eurasian economic order

By Mohammad Hassan Sangtarash

Abstract

This article examines the evolving role of the Strait of Hormuz in the restructuring of global order. It argues that Hormuz is no longer merely a transit chokepoint, but a multidimensional strategic mechanism where hard geography, monetary geopolitics, and asymmetric deterrence intersect.

Applying the concept of the “dialectic of power,” the study analyzes the gradual increase in the marginal cost of maritime dominance in the Persian Gulf, conceptualized here as “organized erosion.” At the same time, it situates Iran within emerging Eurasian frameworks, where processes of monetary diversification—rather than systemic replacement—are reshaping global financial practices. According to International Monetary Fund (IMF) COFER data (2025), the U.S. dollar continues to account for approximately 56–57% of global foreign exchange reserves, underscoring persistence alongside gradual change.

The article further introduces the concept of Iran as an “infrastructure of flow security,” arguing that stability in a multipolar system will increasingly depend on localized control of strategic corridors. Hormuz, in this sense, reflects not a rupture but a transition toward a geographically grounded multipolarity.

Hormuz and the Return of Continental Logic

Since the early 2020s, geopolitical dynamics have increasingly reflected a return of continental logic. The Strait of Hormuz—through which a significant share of global seaborne oil trade transits (IEA, 2025/2026)—has re-emerged as a central node where geography directly shapes strategic outcomes.

Iran’s positioning within this space illustrates how geography can be converted into leverage without requiring decisive confrontation. Rather than a singular escalation, the regional dynamic reflects cumulative pressure, increasing the operational and financial costs of sustained external presence. This process, described here as “organized erosion,” does not imply collapse but gradual redistribution of strategic attention.

One consequence of this redistribution is the emergence of indirect strategic externalities. As the United States allocates sustained resources to the Persian Gulf, other theaters may experience relative easing of pressure. Hormuz, therefore, functions not only as a chokepoint but as a mediator in the broader allocation of global strategic bandwidth.

Monetary Geopolitics and Selective De-Dollarization

The transformation of Hormuz is closely linked to shifts within the international monetary system. While the Bretton Woods legacy remains structurally dominant, recent data point to gradual diversification rather than systemic rupture. IMF COFER data (2025) confirm that the U.S. dollar continues to dominate global reserves, albeit with a modest declining trend.

In this context, de-dollarization should be understood not as a linear transition, but as a form of selective monetary diversification driven by strategic risk management. Under conditions of sanctions and financial fragmentation, states increasingly align monetary practices with geopolitical realities.

Iran’s integration into Eurasian platforms, including BRICS, reflects this adaptive logic. Emerging mechanisms—such as local currency settlements and alternative financial messaging systems—remain partial, yet indicative of a broader shift toward reducing systemic vulnerability.

An analytically relevant dimension of this transformation involves the emergence of indirect revenue architectures linked to transit security. Rather than imposing formal transit fees—which could raise legal and normative challenges under international maritime frameworks—regional actors may facilitate insurance-based mechanisms for secure passage. In such a framework, shipping risk is underwritten by a combination of sovereign guarantees and security provision, potentially denominated in domestic currency.

It is important to clarify that such insurance-based mechanisms are not intended to impose transit tolls, and remain consistent with the principles of the United Nations Convention on the Law of the Sea (UNCLOS), particularly the concept of innocent passage. Rather than restricting access, these models can be understood as cooperative risk-management frameworks, in which regional actors provide enhanced reliability in maritime insurance and security guarantees. In periods of heightened geopolitical uncertainty, such mechanisms may help stabilize insurance costs and ensure continuity of maritime flows without disrupting existing legal norms.

Eurasian Alignment: Russia, China, and Strategic Externalities

Hormuz also generates strategic externalities extending beyond the immediate region. Iran’s role contributes to a broader Eurasian balancing dynamic, where different actors derive distinct forms of benefit.

For Russia, sustained U.S. engagement in the Persian Gulf can translate into relative operational flexibility in adjacent theaters. This dynamic is further reinforced by the development of the International North–South Transport Corridor (INSTC), which enhances the geoeconomic relevance of Hormuz within a wider Eurasian connectivity framework. Beyond energy security, the strategic centrality of Hormuz is increasingly shaped by its function as the southern maritime interface of the INSTC. For Russia, this transforms Hormuz from a distant chokepoint into a critical access point to the Indian Ocean and Global South markets. By linking the Strait’s security environment to the INSTC framework, Iran effectively bridges the Russian heartland with emerging economic zones, repositioning Hormuz as a geoeconomic pivot within Eurasian connectivity. This evolving configuration also creates limited but meaningful opportunities for financial coordination under conditions of sanctions, where technological adaptation plays an increasingly important role.

For China, the issue is more directly tied to structural energy dependence and long-term economic planning. Within the framework of the Belt and Road Initiative, the stability of Hormuz is closely linked to the resilience of maritime supply chains connecting the Persian Gulf to East Asia. Beyond energy flows, the security of Hormuz intersects with China’s broader concept of supply chain security, where uninterrupted maritime connectivity underpins industrial continuity and economic stability.

In post-conflict or high-intensity regional crisis scenarios in the Persian Gulf, this interdependence may deepen further. The economic centrality of Hormuz could support reconstruction dynamics within Iran, including infrastructure development, industrial recovery, and civilian energy projects. In such a context, revenues indirectly linked to transit security may be partially reinvested into long-term agreements with Eurasian partners, contributing to deeper economic alignment.

This process is unlikely to take the form of rigid alliances. Rather, it reflects a pragmatic convergence of interests—including financing mechanisms, technology transfer, and energy cooperation—through which Hormuz evolves from a chokepoint into a platform for post-crisis integration.

Technological Layer: Financial Stealth and Hybridization

Technological change reinforces these structural shifts. The concept of “Financial Stealth”—understood as the increasing opacity and complexity of financial and transactional flows—captures an emerging limitation of traditional sanctions frameworks.

As financial interactions become more decentralized and technologically mediated, the traceability of transactions is reduced, complicating enforcement mechanisms. While such systems remain incomplete and unevenly distributed, they point toward a broader hybridization of power.

A concrete manifestation of this trend can be observed in the gradual interlinking of regional payment infrastructures, such as Russia’s Mir and Iran’s Shetab systems. While still evolving, such initiatives illustrate how localized financial architectures can increase transactional autonomy and reduce exposure to external disruptions. By internalizing settlement processes and data flows, these systems contribute to a broader pattern of financial resilience within Eurasian economic networks.

In parallel, ongoing experimentation with central bank digital currencies (CBDCs) and alternative financial infrastructures among Eurasian actors further reflects this trajectory. Russia and China have explored cross-border payment mechanisms designed to reduce reliance on traditional SWIFT channels, while pilot initiatives such as mBridge demonstrate the potential of blockchain-based settlement systems. Although Iran’s integration into such frameworks remains partial, these developments illustrate an emerging direction in which digital instruments enhance financial resilience under geopolitical constraint.

In the Hormuz context, this hybridization integrates physical control of maritime flows, financial adaptation, and digital mediation of transactions—producing a system that prioritizes flexibility over formal autonomy.

Conceptual Model: The Three-Layered Structure of Hormuz

The strategic transformation of Hormuz can be conceptualized as a three-layered system:

• Physical Layer – maritime geography and energy transit
• Financial Layer – selective monetary diversification and adaptive revenue mechanisms
• Digital Layer – technological mediation, financial opacity, and emerging infrastructures

At the intersection of these layers lies Hormuz as an “infrastructure of flow security,” where strategic influence is derived not from disruption, but from the calibrated management of global flows.

Figure 1: The Triadic Architecture of Strategic Leverage in the Strait of Hormuz
A conceptual model illustrating the interaction between physical, financial, and digital layers, converging in Hormuz as a multidimensional strategic node.

Conclusion

The Strait of Hormuz illustrates the dialectic of power in a transitional international system. It does not mark the abrupt end of an existing order, nor the immediate consolidation of a new one. Rather, it reflects a gradual process in which geography, economics, and technology interact to redefine the parameters of global power.

Iran’s role in this system is best understood as infrastructural rather than hegemonic. By anchoring the security of energy and trade flows—and increasingly shaping the conditions of financial interaction—it contributes to the environment in which a more diversified and multipolar order can emerge.

In this evolving landscape, stability is less likely to be guaranteed by centralized financial authority and more by the localized management of critical nodes. Hormuz, in this sense, represents a transition toward a system in which power is exercised through control of flows rather than formal dominance—where geography, technology, and strategic adaptation converge to finalize the shift from a rules-based order to a reality-based multipolarity