The West’s Blind Spot: How the Hormuz Crisis and Historical Amnesia Distort Its View of Russia and China
Abstract
The 2026 US-Israel war on Iran and the subsequent near-closure of the Strait of Hormuz has triggered consequences far beyond a regional energy crisis. This paper argues that the conflict has simultaneously fractured Western alliance structures, accelerated the decline of the petrodollar, and catalysed the emergence of a genuinely multipolar world order — outcomes that are the precise opposite of what US strategic planners presumably intended. More fundamentally, the paper argues that Western analysis of this geopolitical shift is impoverished by a persistent failure to understand the historical experiences of Russia and China — nations that bore the overwhelming human cost of the Second World War and whose foreign policy is shaped profoundly by that experience. Understanding this context is not an endorsement of authoritarian behaviour. It is a prerequisite for meaningful diplomacy in the emerging multipolar order.
Part One: The Crisis in Context
On 28 February 2026, the United States and Israel launched coordinated strikes against Iran. In retaliation, Iran closed the Strait of Hormuz - the world’s most critical energy chokepoint - to shipping from hostile nations, triggering the largest oil supply shock in recorded history.
The scale of the disruption is stark. Before the war, approximately 20 million barrels of oil per day flowed through the Strait, representing 20 percent of global petroleum consumption. By May 2026, flows had fallen to roughly 6 million barrels per day.
Rather than closing the Strait entirely, Iran implemented a sophisticated “toll booth” regime — granting selective passage to non-hostile nations through the IRGC-controlled Larak Island corridor, in exchange for diplomatic accommodation and transit fees increasingly settled in Chinese yuan. Countries such as China, India and Pakistan have negotiated with Iran seeking safe passage through the Strait, with many other countries following this lead. The fractures in Western alliance solidarity have been severe.
Beneath the energy crisis, a deeper financial transformation accelerated. Iran’s yuan-denominated toll booth transformed de-dollarisation from theory into operational reality. Transit fees that were routed through China’s CIPS payment system - paid by a number of US allies - created a practical precedent for yuan-denominated energy transactions that bypasses dollar infrastructure entirely. The petrodollar system, already weakened by Saudi Arabia’s failure to renew its exclusive dollar commitment in 2024 and the dollar’s decline from 70 percent to 57 percent of global reserves since 1999, faced its most serious structural challenge since 1974.
Developments such as the bilateral deal architecture, alliance fractures and the petrodollar pressure have been extensively documented elsewhere. What follows is less well examined.
Part Two: What the Crisis Reveals
1. Russia and China: The Unintended Beneficiaries
One of the most striking features of the 2026 crisis is that its two greatest beneficiaries have achieved their gains without direct military involvement in the conflict.
Russia’s position is paradoxical. Ukrainian drone attacks actually reduced Russian oil output by approximately 460,000 barrels per day compared to 2025. Yet Russia’s revenues surged by $6.3 billion as higher global prices more than compensated for lower volumes. Russian Urals crude - previously sold at a discount — traded at a premium in Asian markets as buyers scrambled for non-Hormuz supply. Russia earned up to $150 million per day in additional budget revenues during peak price periods, without firing a single shot in the conflict.
More significantly, Russia benefits strategically from every fracture in Western alliance architecture. France blocking UN resolutions alongside Moscow and Beijing, European nations negotiating directly with Tehran, NATO members refusing Trump’s military requests - each of these developments serves Russia’s long-term interest in a fragmented, less cohesive Western order. Russia needed only to watch.
China’s gains are deeper and more structural. Beijing is the indispensable intermediary in the new energy order — its CIPS payment system processes yuan-denominated transactions; its manufacturing capacity supplies what oil producers need in exchange for energy; its diplomatic positioning as a neutral mediator enhances its global standing. Every tanker that pays Iran’s yuan toll deepens the practical infrastructure of a parallel financial architecture that operates alongside, rather than within, the dollar system.
The profound irony is that the United States initiated a war presumably intended to demonstrate American power and reassert strategic dominance. The actual consequences have been the systematic empowerment of both of America’s principal strategic competitors — without either needing to deploy a single soldier.
2. The Global South and the New Energy Diplomacy
The crisis has reshuffled the strategic positioning of the developing world in ways that will outlast the conflict itself.
Southeast Asia experienced acute pain. Yet these countries responded not by aligning with the US position, but by pursuing bilateral energy diplomacy with Iran regardless of formal alliance obligations. Indonesia’s response was particularly instructive. President Prabowo Subianto - who had recently joined Trump’s “Board of Peace” - executed what analysts described as a sophisticated four-country diplomatic circuit between late March and mid-April 2026, visiting Japan, South Korea, Russia and France to advance energy diversification and supply chain resilience.
India navigated most skillfully of all — securing passage for Indian tankers from Iran early in the crisis, positioning itself simultaneously as a critical redistribution hub for Middle Eastern crude and a country maintaining warm relationships with both Washington and Tehran. India exemplifies the “strategic autonomy” model that the new multipolar order makes possible for large middle powers: the freedom to pursue national interests without being conscripted into someone else’s alliance structure.
China’s offer to refinance African governments’ dollar-denominated loans in yuan at lower interest rates - observed at a Dakar conference in May 2026 - extends this dynamic further. For countries long subject to IMF austerity conditions attached to dollar debt, this represents a genuine alternative architecture. The petrodollar’s grip on the Global South is loosening not through ideology but through the pragmatic arithmetic of better terms.
3. A Multipolar World: The Honest Assessment
The emergence of a multipolar world order from this crisis raises a question that deserves honest engagement rather than ideological reflexivity: will it be better or worse for humanity?
The case for multipolarity as an improvement rests on serious arguments. The concentration of such extraordinary power in any single nation is structurally incompatible with genuine global democracy. The US-led order, for all its accomplishments, too frequently served American interests dressed in the language of universal values - regime change operations, dollar-denominated debt conditions, extraterritorial sanctions law, support for authoritarian governments when strategically convenient. Alternatively, in a world in which multiple currency options exist, development finance comes without political conditionality, and no single power can impose its preferences through financial system dominance, represents genuine gains in sovereignty for smaller nations.
But the case against multipolarity deserves equal weight. The alternative poles of the emerging multipolar world are not obviously more benign. Russia under Putin is an authoritarian state that has invaded neighbouring countries and dismantled democratic institutions. China is a one-party surveillance state that has suppressed minorities and eliminated Hong Kong’s democratic freedoms. A world in which these models gain legitimacy is not straightforwardly an improvement on the one it replaces. More fundamentally, the truly existential challenges facing humanity - climate change, nuclear proliferation, pandemic preparedness, artificial intelligence governance - require global cooperation at scale. Historical evidence suggests that fragmented multipolar systems find such cooperation harder to achieve than hegemonic ones, however imperfect those hegemonies may be.
The conclusion is that the emerging multipolar world may be fairer in its distribution of power while simultaneously being less capable of coordinating responses to shared existential threats. Whether it proves better or worse will depend on choices not yet made - above all, whether the emerging powers choose to build genuinely inclusive multilateral institutions or merely use multipolarity as cover for their own dominance within regional spheres.
4. The World War II Context: What the West Persistently Fails to Understand
No analysis of the emerging multipolar order is adequate without confronting a historical context that Western commentary almost universally ignores: the catastrophic human losses suffered by Russia and China in the Second World War, and the profound ways in which those losses shape both nations’ strategic thinking today.
The casualty figures are not in dispute, though their scale defies easy comprehension. The Soviet Union suffered between 20 and 27 million deaths - the highest of any nation in the conflict. Approximately 11.4 million were military deaths; the remainder were civilians killed by military activity, famine and disease. A quarter of the entire Soviet population was killed or wounded. China suffered approximately 20 million deaths, the vast majority civilian, as a consequence of Japanese invasion and occupation. Poland lost approximately 5.9 to 6 million people - 20 percent of its pre-war population. The United States lost approximately 420,000 people - less than 0.3 percent of its population - in a war conducted entirely on foreign soil. No American city was besieged, bombed to rubble or occupied. Life on the American mainland continued largely uninterrupted.
Critically, approximately 85 percent of all Allied deaths in the Second World War were Soviet or Chinese. The countries that bore the overwhelming burden of defeating fascism were Russia and China. However, the post-war international order was designed primarily by the nation that had suffered least.
These numbers are not merely historical statistics. They are the living foundation of how Russia and China understand the purpose of state power, the meaning of national security, and the limits of trust in Western intentions.
For Russia, the Second World War - the Great Patriotic War - is not distant history but living national identity. The siege of Leningrad alone, lasting 872 days, killed more people than the entire American losses in the war. When Russian leaders insist they will never again permit hostile military forces to mass on Russia’s borders, this is not propaganda. It is a deeply felt national commitment forged in the most catastrophic suffering any modern nation has endured. NATO’s eastward expansion after the Cold War, experienced by Russian leaders through this historical lens, carried echoes of the encirclement that preceded the 1941 invasion. Western dismissal of this perspective as mere excuse-making reflects a failure of historical imagination rather than hard-headed strategic analysis.
For China, the Japanese invasion and occupation produced comparable national trauma. The Nanjing Massacre, the biological warfare of Unit 731, the systematic destruction of Chinese cities - these events are within living memory, and they form the bedrock of Communist Party legitimacy: the party that ended the “century of humiliation” in which China was repeatedly invaded and exploited by foreign powers. China’s insistence on absolute sovereignty, its deep resistance to foreign interference, its determination never again to be in a position of military weakness - all of these are comprehensible, even reasonable, when viewed through this history.
None of this requires endorsing either government’s actions today. Putin’s invasion of Ukraine caused immense suffering to a people who themselves bore staggering losses in the Second World War. China’s treatment of Uyghurs and its suppression of Hong Kong deserve clear-eyed criticism regardless of historical context.
But the West’s persistent refusal to acknowledge these historical experiences - to treat Russia and China as simply irrational adversaries rather than nations shaped by specific and comprehensible historical traumas - does not make Western analysis more rigorous. It makes Western policy less effective and more dangerous. You cannot negotiate meaningfully with a country whose most fundamental security anxieties you refuse to understand.
The current crisis illustrates this failure acutely. The United States initiated a war against Iran to further extend US military power in Eurasia apparently without serious consideration of the hypersensitivity of other nations. The result has been precisely the acceleration of the multipolar alignment that US policy has long sought to prevent.
5. The Profound Irony of Strategic Overreach
The deepest irony of the 2026 Iran war is that it has delivered, with extraordinary speed, precisely the outcomes that those most opposed to US global dominance had long sought but struggled to achieve through deliberate effort.
De-dollarisation advocates had spent decades arguing that the petrodollar system was a mechanism of American domination. The Hormuz crisis compressed decades of gradual change into months, by creating a practical, operational yuan payment mechanism that US treaty allies were willing to use.
Advocates of multipolarity had argued that American overreach was eroding the legitimacy of US leadership. The Iran war has validated these arguments more comprehensively than any theoretical paper or diplomatic initiative could. Russia and China had sought for years to demonstrate that the Western alliance was less cohesive than it appeared. The spectacle of France blocking UN resolutions alongside Moscow and Beijing, of European nations negotiating directly with Tehran, of Japan and South Korea quietly cutting energy deals with Iran while publicly maintaining alliance commitments, has exceeded what either power could reasonably have hoped to achieve through their own efforts.
Nobody planned this outcome. It was not a Chinese strategy or a Russian plot. It emerged organically from the collision of American maximalism with the energy realities of a deeply interdependent world. The United States initiated a war presumably to demonstrate power. The actual demonstration has been of power’s limits - the inability to reopen a strait it cannot control, the failure to hold alliance solidarity under economic pressure, the acceleration of the financial architecture designed to displace the dollar.
History may record the 2026 Iran war as the moment the American century effectively ended - not on a battlefield, but through the quiet, transactional decisions of dozens of countries choosing energy security over political loyalty, and yuan over dollars.
Conclusion: Toward a More Empathetic Geopolitics
The Hormuz crisis of 2026 is not primarily a story about oil. It is a story about the collapse of assumptions - about alliance solidarity, dollar dominance, the effectiveness of military power in a complex interdependent world, and the durability of a unipolar order built on the foundations of a very different era.
The most important contribution that Western analysis can make to navigating the transition now underway is not more sophisticated containment strategies or more targeted sanctions regimes. It is the harder, more humbling work of genuine historical empathy - understanding why Russia and China see the world as they do, not to excuse their actions, but to make possible the kind of mutual comprehension on which any durable peace must be built.
The 27 million Soviet dead and the 20 million Chinese dead of the Second World War are not merely historical statistics. They are the foundation of a worldview that will shape international politics for generations to come. A West that takes the time to truly reckon with those numbers - to feel their weight, to understand what they mean for the nations that bore them - will be far better equipped to build a stable world than one that continues to paint the emerging order in the simple colours of good and evil.
The world is not choosing between Western virtue and Eastern malevolence. It is navigating a transition between imperfect configurations of power, each shaped by historical experiences that deserve to be understood on their own terms. The quality of that navigation will be determined by whether we can find the wisdom to approach it with open eyes, open minds - and the humility to learn from history that was not our own.
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This paper was developed through an extended analytical dialogue examining the Hormuz oil crisis from first principles. The analytical framework and core arguments — including the World War II casualty context as an explanatory foundation for Russian and Chinese strategic behaviour — were developed by the author. AI assistance was used in research, fact-checking and drafting. The author takes full responsibility for all conclusions.