Geopolitical Economy Report The war on Iran is transforming the global economy: Economist Michael Hudson explains how
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Mar 29, 2026 
Michael Hudson, economist and author on imperialism, finance, and the global political economy, offers a big-picture take. He discusses Iran’s challenge to dollar dominance and control of the Strait of Hormuz. He explains the petrodollar system, how oil revenues shape global leverage, and why current fighting has triggered the biggest oil shock and risks for energy, food, and debt crises.
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Largest Oil Shock Threatens Global Recession
- The US‑Israeli war on Iran has caused the largest oil shock in history, disrupting global fuel and fertilizer supplies and risking a global recession.
- Michael Hudson links Strait of Hormuz closures and Iran pushing sales in yuan to a shift away from petrodollar dominance and rising commodity inflation.
Iran Declares Control Over Hormuz And Oil Trade
- Iran claims a phase change: permanent control over the Strait of Hormuz and leverage over the oil trade, reversing US choke‑point strategy.
- Hudson argues this hands Iran the ability to impose sanctions and disrupt dollar‑based oil revenues that underpin US power.
Hudson's 1970s Insider Memory Of US Oil Plans
- Hudson recounts his 1970s experience working on oil and balance‑of‑payments issues at Chase Manhattan and with the Hudson Institute, observing US plans to control Middle Eastern oil.
- He describes military options discussed then, including carving up Iran and using client armies as part of long‑term US strategy.