Hormuz and the Transition from Bretton Woods: The Return of Geography in the New Monetary Architecture A critical analysis of how the Strait of Hormuz is reshaping the global geopolitical and monetary order

By Mohammad Hassan Sangtarash

Amid the rapid transformations of the international system, what is unfolding around Iran and the Strait of Hormuz is not merely a regional crisis; rather, it is indicative of a profound shift in the political economy of power on a global scale. War, sanctions, and structural pressures, instead of fully weakening Iran, have paradoxically turned the country into one of the decisive nodes in the reconfiguration of the global monetary and geopolitical order.

In the previous order, rooted in the Bretton Woods agreements, the economic power of the United States, gold accumulation, and industrial superiority established the dollar as the backbone of global transactions. Today, however, as many global actors have become increasingly aware of the consequences of dependence on the dollar, a gradual yet meaningful transformation is emerging from the “peripheries.” In this context, Iran has entered the equation not through classical financial power, but through the geopolitics of the Strait of Hormuz.

The Strait of Hormuz is no longer merely an energy corridor; it has evolved into an economic-monetary lever. Under conditions of war and intensifying great power competition, control over this critical chokepoint has enabled Iran to impose different rules on the settlement of transactions. Whereas in the past, currency choice in global trade largely reflected state preferences, in certain contexts today it is becoming a matter of geographical necessity. This signifies a gradual transition from an order based on choice to one shaped by geopolitical constraints.

Within this framework, the role of the dollar has not been completely undermined, but its monopoly is eroding. International data still indicate the dollar’s significant share in global reserves; however, emerging trends—from bilateral settlements in local currencies to the use of the yuan in certain strategic routes—point to the formation of a layered monetary system. Iran, under the pressure of sanctions and external constraints, has inadvertently become one of the testing grounds for this transition.

Recent developments in the United Arab Emirates, including restrictions on Iranian financial activities and the closure of traditional channels of access to the dollar, have effectively blocked Iran’s access to the global financial system. Yet, this very action has unintentionally generated both the incentive and necessity for a new developmental trajectory—one that does not pass through Dubai, but through Hormuz, and is defined by non-dollar mechanisms. In other words, Iran’s financial geography is shifting from external free zones to internal territorial advantages.

This transformation is not merely technical; it carries profound implications for Iran’s position in the global order. In a world moving toward multipolarity, countries capable of controlling strategic chokepoints—whether in energy, transit, or data—will play a more decisive role in shaping the rules of the game.

In this context, the importance of groups such as BRICS is also amplified. Once perceived primarily as a political idea to balance the West, BRICS is now evolving into a platform for testing alternative financial mechanisms. Iran’s presence in, or proximity to, this bloc—particularly in areas such as non-dollar settlements—could enhance its position in the global economy.

Multilateralism here is not a slogan, but a structural necessity. A world characterized by insecure energy routes, fragile supply chains, and intensified geopolitical competition is inevitably moving toward a distribution of power and diversification of financial instruments.

From a domestic perspective, these developments may also have significant implications. One notable scenario is the potential return of part of the capital held by Iranians abroad. As financial activities in traditional hubs such as Dubai become increasingly constrained, and as new pathways emerge domestically, incentives for capital repatriation may grow—especially if accompanied by institutional reforms and economic guarantees. Such a return could strengthen the country’s productive and financial foundations.

Ultimately, it must be emphasized that the emerging global order is not being shaped through predetermined designs, but rather through crises and necessities. War, sanctions, and great power competition generate threats, but also create new opportunities. Contrary to many predictions, Iran has managed to define a new position for itself from within these pressures—one grounded in the combination of geography, resilience, and adaptation.

Success along this path depends on multiple factors. What is clear, however, is that Iran is no longer merely a passive actor in the global order; it has become one of the arenas where the future of this order will, to some extent, be determined.