For financial markets, the announcement of a provisional 60-day truce between the United States and Iran was enough to trigger relief. Oil prices collapsed nearly 20% in May. Equities climbed back towards record highs. Investors rushed once again into the comforting illusion that geopolitical crises can always be stabilised before becoming systemic. But beneath the market optimism lies a far more uncomfortable reality. This agreement does not resemble victory. It resembles exhaustion. After three months of military escalation, disrupted shipping routes, collapsing energy flows and global inflationary shockwaves, Washington now appears less like an empire imposing order and more like a heavily indebted superpower desperately trying to prevent the global financial system from sliding into something it can no longer fully control.

That distinction matters enormously. Officially, the United States insists its “red lines” remain unchanged: free navigation through Hormuz, the surrender of Iranian highly enriched uranium and the end of Tehran’s nuclear ambitions. Unofficially, however, the negotiation itself already reveals the strategic shift. Because great powers that dominate global trade routes do not normally negotiate the conditions under which commercial ships may circulate through international waters. Yet this is precisely what is happening. Iran continues demanding influence over maritime traffic. Discussions with Oman regarding new transit mechanisms continue. Tehran still wants frozen assets released. The United States simultaneously denies certain Iranian claims while tacitly recognising that a new regional balance will inevitably emerge around Hormuz.

In reality, both sides already understand something markets still underestimate. The old globalisation model has been structurally damaged. Even if oil prices temporarily fall, even if shipping resumes progressively, even if a broader agreement eventually emerges, the crisis has already transformed investor psychology. The illusion of permanently secure global supply chains has disappeared. The numbers alone are staggering. A fifth of global oil and LNG supplies was effectively disrupted for months. Shipping traffic through Hormuz nearly collapsed. Insurance costs exploded. Freight routes were paralysed. Strategic reserves were depleted globally. Energy inflation spread into transport, food, logistics and manufacturing almost everywhere simultaneously. And the economic consequences are only beginning. Because oil markets do not restart like software applications. Even Bloomberg’s own reporting now openly recognises that restoring production, clearing mines, repairing damaged infrastructure and normalising tanker flows could take months. Some analysts estimate that global markets may still lose another billion barrels of effective supply during the transition phase. This is precisely where the American problem becomes visible. Washington needed this truce far more urgently than Tehran.

The United States entered the crisis with already fragile public finances, structurally elevated deficits, a weakening appetite for Treasuries abroad, and inflation that was never fully defeated after the post-COVID monetary excesses. Then came the Iran war. Suddenly, higher oil prices collided with already fragile bond markets. Inflation expectations surged again. Long-duration Treasury yields rose dangerously. The cost of refinancing American debt rose precisely when deficits were structurally exploding. And unlike previous decades, the Federal Reserve no longer possesses unlimited room for manoeuvre. This is what makes the current situation profoundly dangerous for the dollar system. The United States can still project military power globally. But projecting military power while simultaneously financing enormous deficits at elevated interest rates becomes increasingly difficult once foreign creditors begin questioning long-term monetary stability. This is why bond markets matter far more than equity markets. Equities still behave as if central banks will eventually rescue everything once again. Bond investors are becoming less convinced.

For decades, Washington used the dollar system itself as a geopolitical weapon through sanctions, financial restrictions and control over global payment infrastructures. But every weapon eventually creates incentives for others to build alternatives. China increases energy purchases outside the traditional dollar framework. Russia adapts through parallel financial networks. Gulf countries diversify diplomatically. Emerging markets increasingly discuss local-currency trade settlement. None of these shifts individually destroys dollar dominance. Together, over time, they slowly erode it. And this is where the Hormuz crisis becomes symbolic. The world has just witnessed the United States struggle for months to secure a maritime route that globalisation itself depends upon, while simultaneously discovering that military superiority no longer automatically guarantees economic stability. That changes perceptions. And reserve currencies ultimately depend on perception as much as power. For now, markets celebrate falling oil prices and the possibility of calmer inflation. But structurally, the crisis leaves behind something far more dangerous: the visible demonstration that the global financial system has become extraordinarily vulnerable to geopolitical fragmentation. The Strait of Hormuz may reopen. The illusion of stability probably will not.