Iran struck a cargo ship in the Strait of Hormuz with a drone. How does this impact confidence in the fragile Iran-US ceasefire deal?

Iran has no intention of loosening its grip on the Strait of Hormuz, the world's most important energy chokepoint. They see it as their key strategic gain from the war. They are enforcing a new protocol (PGSA) requiring vessels to register and pay a service fee. The Singaporean vessel that didn't comply was struck. This does not break the ceasefire because the deal was already a US concession to Iran's weaponization of the strait.

Why did the US miscalculate that Iran would not weaponize the Strait of Hormuz, given it was an obvious outcome?

The analytical error was assuming Iran would have to use sea mines to close the strait, which would be economically suicidal for them. Instead, Iran used radio warnings and a dozen drone/missile strikes to change the risk calculus for the entire shipping industry. They selectively closed the strait for everyone else but themselves, a different type of power the US did not anticipate.

Trump said he averted a global depression with the deal. If we don't invade Iran, will the world face a global economic depression from this chokepoint being closed?

No, that assessment is not accurate. Even if Iran charges a toll of $1-2 million per large tanker, that's only 2-3% of the cargo value. For oil producers like Saudi Arabia, paying Iran billions a year is well worth it to get their ships out. Iran has simply monetized the chokepoint. There is more political support for paying Iran than for a massive costly military venture.

The oil market (WTI ~$70) is not pricing in escalation. How do you see this playing out in the next few months?

The market is reading it correctly. Iran will monetize the strait via fees or insurance schemes. The key question is how much this depresses shipping volumes. Pre-war was 130 crossings/day; after the strike it was 70. We might get back to 100-110, but not 130. This may not matter much for oil markets, which were already looking well-supplied.

How has the world changed following the revelation that chokepoints can be weaponized?

Once a chokepoint is weaponized, vulnerable countries take steps to insulate themselves. This creates an action-reaction cycle. Examples: China created CIPS after US sanctions on Russia; the US invested in rare earths after China weaponized them; China is indigenizing semiconductors after US export controls. Coming out of this crisis, we will see: 1) More pipeline infrastructure in the Gulf to bypass Hormuz. 2) Increased energy storage near Asian buying markets. 3) A meaningful acceleration of clean energy adoption (solar, batteries, EVs), but this risks swapping one dependency (Hormuz) for another (Chinese dominance in clean tech, where they have 70-95% market share).

All this sounds like more protectionism and less free trade. Is that the direction?

Yes, that is the macro trend. Every US president in the 21st century has imposed sanctions at twice the rate of their predecessor. This is a secular trend also seen globally. We are moving away from open globalization toward something more restrictive. The big question is whether it becomes autarky (every nation for itself) or a Cold War-style splintering into economic blocs.

Is the global rearmament trend (Japan, US, Germany) correlated or caused by the same factors as the chokepoint weaponization?

Both trends are driven by the same factor: the return of geopolitical competition. Regions realize they have real military threats on their borders and cannot just depend on US security guarantees. They need their own ability to defend themselves.

What is the next major chokepoint to watch?

1) Energy: We could move from a Hormuz dependency to a Chinese clean-tech dependency (solar, batteries, EVs). The West has no viable competitors. 2) Pharma: China is dominant in active pharmaceutical ingredients and moving into biotech. 3) Maritime: Indonesia has mooted a toll on the Strait of Malacca. If Iran gets $40B/year from Hormuz, how long before Indonesia monetizes Malacca? 4) Taiwan: Iran's playbook provides a model for China to establish naval patrols and collect customs duties in the Taiwan Strait without an amphibious invasion. This is a creeping annexation risk.

The West is years behind TSMC. Is the window closing for China to act on Taiwan?

Xi Jinping is attuned to his legacy and wants closer integration of Taiwan before he leaves office. Over time, Taiwan could become better defended (lessons from Ukraine and Iran on how smaller powers can defend against larger militaries). This gives China an incentive to act sooner rather than later. However, Chinese military strategy is to win without fighting, so a creeping annexation (customs duties, naval patrols) is more likely than an amphibious invasion.