"America's Suez Moment: How Losing
Hormuz Could End US Global Dominance"
by Nick Giambruno
"The way I see it, the US has two unappealing choices: Launch a full-scale ground invasion and try to topple the Iranian government. Try to create the appearance of a win, and declare victory by claiming the objectives were met even when they clearly were not. President Trump can choose option #2, but it would be widely perceived as a defeat. International relations scholar John Mearsheimer put it best: "Most of them say that President Trump should quickly declare victory and withdraw from the war. He can do this, but it will be perceived as a humiliating defeat for the US."
Moreover, the Iranians may not agree to end the war. The Iranians have many cards to play. They can inflict significant losses. Therefore, even if we retreat, it’s unclear whether this will solve the problem. The US will still look like it has suffered a humiliating defeat. Therefore, I think President Trump has put himself in a situation where he really doesn’t have a good exit strategy." If the US declares "mission accomplished" while Hormuz remains closed that would amount to an unambiguous strategic defeat for the US.
I would estimate that each choice has about a 50% probability at this point. But regardless of what Trump ultimately chooses, I think the outcome is unlikely to change—a historic geopolitical downgrade for the US. If Trump chooses to declare a fake victory, it would amount to surrendering Hormuz to the Iranians. If Trump chooses to launch a full-scale ground invasion of Iran, I predict it would be ill-fated, with a very low chance of success.
Remember, Iran, like Switzerland, has rugged mountainous terrain that has helped shield it from invasion. But Iran is not merely another Switzerland. At roughly 1.65 million square kilometers, it is about 40 times larger than Switzerland.
While the situation is fluid, volatile, and impossible to predict with precision, I think it is still possible to project the general outcome and the broader implications. Whether the US declares victory and leaves or rolls the dice on a full-scale ground invasion, the outcome is likely to be the same. There is an overwhelming probability in my view that the Iranian government will endure and retain an acknowledged veto power over the world's most important energy corridor.
It is simply a question of how we get there - either through a quick US capitulation or through US capitulation after a long, bloody, and ultimately fruitless ground invasion. The implications of that likely outcome are historical. The US failing to achieve its objectives in Iran would not be just a military setback. It would be something far worse: a public demonstration that the US is no longer the superpower many once believed it to be. It is perhaps comparable to Britain’s 1956 Suez Canal Crisis, when the UK failed to impose its will on a far weaker Egypt. It was a public display that showed the world the British Empire was finished. That is why Hormuz matters so much.
If the US were unable to reopen the Strait on its own terms - or if it had to accept a world in which Tehran effectively decides who passes, under what rules, and at what cost—the message would be unmistakable. It would signal to allies, rivals, and markets alike that the world’s leading superpower can no longer guarantee the flow of commerce through the most important energy corridor on Earth.
In that sense, losing Hormuz would be America’s Suez: not just a tactical failure, but a visible geopolitical downgrade with profound implications for US credibility and the structure of the world order. And that is what I believe is likely to happen in the weeks ahead. But most people - and certainly not the financial markets - have not yet wrapped their heads around this geopolitical earthquake.
Conclusion: In my view, the base-case scenario is that the Iranian government will survive and continue to control Hormuz. Iran will have demonstrated to the world that it retains control over the world’s most important energy corridor despite everything the world’s greatest military threw at it. In short, the US will suffer an unambiguous strategic defeat. As a result, I believe US global power will continue to recede within the emerging multipolar world order. We could look back on Trump’s reckless Iran gamble as the incident that marked the end of the US as the world’s leading power.
The larger implication? We are likely witnessing the end of US global dominance, much like the fall of the British Empire in the wake of the world wars and the 1956 Suez Canal Crisis, but significantly more consequential. In other words, no matter what happens, I’m confident the outcome of the Iran war will make it clear to the world that the emperor has no clothes."
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