As the world approaches the end of May 2026, attention is once again focused on the Middle East. The Strait of Hormuz is echoing with explosions as the United States and Iran engage in both negotiations and military actions simultaneously. The White House has indicated that there is "progress," but President Donald Trump has also warned that he could "end it all again if necessary." Iran, while expressing a desire to maintain a ceasefire, criticizes the U.S. for its limited airstrikes, calling them a "violation of the ceasefire."
The current situation is characterized by a peculiar form of warfare that is neither full-scale war nor complete peace. It is not a ceasefire, nor is it a formal end to hostilities. Negotiations are ongoing, yet the sounds of conflict persist. This is a classic example of a 21st-century gray zone war. However, the essence of this conflict extends beyond mere military clashes; it intertwines issues of nuclear weapons, oil, the dollar system, U.S.-China power competition, and the competition for supply chains in the AI era. The Strait of Hormuz has become a fault line for the entire global order.
A key feature of the current crisis is that war and diplomacy are moving in tandem. The U.S. and Iran are discussing a memorandum of understanding (MOU) for peace, with both sides signaling that there is "progress." The U.S. State Department and the White House maintain that negotiations have not completely broken down, and Iran has not officially closed the door on diplomatic solutions. However, U.S. forces have conducted airstrikes on Iranian military facilities near the Strait of Hormuz just two days later, which they claim are "defensive measures." They reported shooting down four Iranian drones and striking a ground control station preparing to launch a fifth drone. While this appears to be a limited confrontation, global financial markets and the international community do not view it as merely a localized conflict, given that the Strait of Hormuz is the heart of global oil transportation. A significant portion of the world's maritime oil traffic passes through this region, serving as a lifeline for manufacturing nations like South Korea, China, and Japan. If this area were to be blocked or enter a prolonged state of instability, international oil prices could surge, global logistics could be disrupted, and inflation could rise again.
The U.S. is acutely aware of these stakes. President Trump has cultivated an image as a "president who does not prolong wars." He prefers to pressure and negotiate with limited military action rather than engage in large-scale ground wars. However, Iran does not operate on the U.S. timetable. While the U.S. seeks speed, Iran uses time as a weapon, a strategy rooted in the ancient survival tactics of Persian civilization. The U.S. is a young superpower with only 250 years of history, while Iran has a legacy of 5,000 years. The U.S. has historically wielded military and financial power to influence the world, but Iran has learned to endure external pressures and imperial domination throughout its long history. Thus, as U.S. military pressure increases, Iran opts for a strategy of delay and psychological warfare rather than direct confrontation. In fact, Iran is currently managing tensions rather than launching immediate large-scale retaliation, fully aware of the risks of total war. The Iranian economy is already devastated by sanctions, with rising youth unemployment, inflation, and systemic fatigue. Meanwhile, the U.S. also does not desire a full-scale war, as its economy has not fully escaped inflationary pressures, and a prolonged conflict could pose political challenges for Trump ahead of the elections. Ultimately, the current situation represents a precarious balance where neither side can fully attack nor easily retreat.
The core issues in the U.S.-Iran negotiations can be summarized into four main points. First is the nuclear issue. President Trump has repeatedly stated that "Iran's possession of nuclear weapons is absolutely unacceptable." The U.S. is particularly concerned about Iran's stockpile of 440 kilograms of uranium enriched to 60%. Nuclear experts generally consider uranium enriched to 90% to be weapon-grade, but 60% enrichment is already deemed a significant risk, as it can be further enriched in a short time. The U.S. believes that it cannot move toward a peace settlement without eliminating or controlling this stockpile. Conversely, for Iran, nuclear capability is not merely a weapon; it is a guarantee of regime survival. The case of Libya's Gaddafi regime, which collapsed after giving up its nuclear program, has left a deep trauma in the Iranian leadership.
The second issue is the handling of uranium. The U.S. strongly opposes the idea of China and Russia taking Iran's enriched uranium, as these nations are strategic competitors. A potential alternative could involve third-party management, particularly with Pakistan, which is an interesting option. Pakistan is the first nuclear-armed nation in the Islamic world and maintains a strategic relationship with China while not being entirely hostile to the U.S. It also has deep ties with Saudi Arabia. If some of Iran's enriched uranium could be temporarily stored in an internationally managed facility in Pakistan under the supervision of the International Atomic Energy Agency (IAEA), the U.S. could alleviate concerns about nuclear proliferation while allowing Iran to save face. Diplomacy ultimately involves creating exit strategies that do not leave the other side feeling completely defeated.
The third issue is the Strait of Hormuz itself. This region is not just a maritime passage; it is a vital artery of modern civilization. The global economy still operates on oil and LNG. Even in the AI era, semiconductor factories and data centers require vast amounts of power and energy. AI consumes enormous energy, and data centers, semiconductor plants, cloud servers, and supercomputing systems demand unprecedented energy resources. This is why U.S. tech giants are competing for nuclear, LNG, and renewable energy resources. Ultimately, the AI era is not merely a post-oil age but rather a period of energy hegemony reconfiguration. Therefore, the Strait of Hormuz is likely to remain a critical variable in the global economy for the foreseeable future.
For China, the Strait of Hormuz is a lifeline. As the world's largest manufacturing nation and one of the largest oil importers, China's factories, logistics, cities, and industrial zones depend on the energy flow from the Middle East. If the Strait of Hormuz were to become unstable in the long term, the Chinese economy could face severe pressure. The U.S. is well aware of this, which is why its strategy extends beyond merely pressuring Iran; it also aims to control China's energy arteries. This is where the Middle East issue intersects with U.S.-China power competition. China is strengthening its strategic relationship with Iran, as is Russia. Meanwhile, the U.S. seeks to establish a new Middle Eastern order centered around Saudi Arabia, the UAE, and Israel. Ultimately, the Middle East is becoming a crossroads for a new Cold War.
Whereas the previous Cold War was a clash between liberalism and communism, the current conflict is far more complex, involving AI hegemony, semiconductor supply chains, energy control, maritime logistics, the dollar system, and digital finance, all intertwined with religious and civilizational factors. The issue of the dollar system is particularly significant. The U.S. has controlled the global economy through the dollar. The SWIFT payment network and international financial systems are essentially structured around U.S. interests. Sanctions against Iran were ultimately a financial blockade through the dollar system. However, recently, China, Russia, and some Middle Eastern countries have been expanding their de-dollarization efforts, increasing transactions in yuan, gold trading, and energy transactions in their own currencies. While this has not yet shaken the dollar system, the U.S. is feeling a sense of crisis, as one of the core elements of dollar hegemony has been the Middle Eastern oil payment system. If the Middle Eastern order shifts from a U.S.-centric model to a multipolar system, the dollar system will inevitably be affected in the long term.
In fact, the conflicts currently unfolding in the Middle East are not merely clashes of national interests. They encompass simultaneous conflicts between Jewish and Islamic civilizations, Shia and Sunni sects, and the U.S.-centric order versus a multipolar system. Since the Trump era, the Middle East has begun to create a new dynamic through the Abraham Accords, establishing a pragmatic coexistence order centered around Israel, the UAE, and Saudi Arabia. However, Iran remains excluded from this framework. Therefore, moving forward, it is essential to evolve from the Abraham Accords to the Noah Accords. Judaism, Christianity, and Islam ultimately share a common root. The lineage of Shem, one of Noah's descendants, connects the spiritual origins of today's Jewish, Arab, and Persian worlds. True peace in the Middle East can only begin with the recognition that "one cannot completely eliminate the other."
Currently, the global financial market operates on three massive axes: the AI revolution, U.S.-China power competition, and Middle Eastern risks. Until now, global stock markets have been driven by the AI rally, with U.S. AI semiconductor companies and big tech remaining at the center of the market. However, the Middle Eastern variable poses a significant risk that could disrupt this trend at any moment. If the U.S. and Iran succeed in reaching a limited agreement and stabilize the Strait of Hormuz, global stock markets are likely to continue their AI-driven upward trajectory. Conversely, if negotiations collapse completely and the crisis in the Strait of Hormuz escalates, international oil prices could soar, and global inflation could resurface. The U.S. Federal Reserve may find it difficult to lower interest rates, and the world economy could face the risk of stagflation. Chinese manufacturing and European industries could suffer significant blows, and South Korea would inevitably experience direct impacts.
Although South Korea is geographically distant from the Middle East, it is not in a safe zone. The South Korean economy is export-driven and heavily reliant on energy imports. Instability in the Strait of Hormuz would directly lead to increased costs for South Korean industries. Semiconductor companies like Samsung Electronics and SK Hynix ultimately grow based on global financial stability and energy security. A surge in international oil prices and geopolitical conflicts would inevitably burden the entire South Korean stock market. Therefore, South Korea must simultaneously pursue energy supply chain diversification, strengthen its competitiveness in AI and semiconductor industries, and implement a balanced diplomatic strategy in the Middle East.
Today, the world does not operate solely on military power. We are in an era where energy, AI, finance, supply chains, civilization, and geopolitics move simultaneously. The Strait of Hormuz is not just a body of water; it is a microcosm of the 21st-century world order. Humanity is currently testing a new order over that sea: a system of coexistence rather than a balance of warfare, a management system of trust rather than the fear of nuclear weapons, and a civilizational imagination that transcends the Abraham Accords towards the Noah Accords. This is the path for the Middle East and the world to survive together.
* This article has been translated by AI.
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