The Iran War is Accelerating the End of Globalism | Jacob Shapiro
What this covers
A war few expected to last this long is exposing how fragile global systems really are, raising a deeper question about whether we're witnessing a temporary disruption or the end of a the U.S. unipolar era.
Geopolitical analyst Jacob Shapiro joins us to break down the Iran conflict, the Strait of Hormuz, and how shifting power dynamics are reshaping global markets and strategy.
We unpack shipping flows, supply chain fractures, energy chokepoints, multipolarity, and why markets may be underestimating cascading global disruptions. Enjoy!
TIMESTAMPS: 00:00 Intro 02:42 Iran War Framework 07:23 What Actually Matters 11:46 Counting Ships, Not Headlines 15:59 Beyond Hormuz 20:20 Hidden Supply Chain Risks 25:20 Ads (Arkham, Blockworks IR) 27:11 How Long Until Damage? 32:01 Negotiations or Theater? 35:55 Why Markets Still Shrug 40:18 China’s Quiet Advantage 47:56 The Bull Case Remains
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Shapiro argues that the Iran-US conflict represents an acceleration of deglobalization and multipolarity that will reshape global supply chains and create winners and losers based on energy self-sufficiency and technological positioning, with the critical near-term metric being physical ship traffic through the Strait of Hormuz rather than political headlines.
- Iran's asymmetric advantages (Strait control, cheap distributed weapons) make a short US victory impossible, prolonging economic disruption
- Supply chain vulnerabilities are real and moving from East Asia to Europe/Americas within weeks if disruption continues
- China and energy-secure countries gain relative advantage; vulnerable emerging markets and energy-dependent allies face severe pain
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The Philippines, a US treaty ally, has shifted toward China for pragmatic energy partnerships within weeks of the Strait crisis, announcing joint exploration in the South China Sea with China after declaring an energy emergency, demonstrating how supply chain disruption forces realignment.
“The Philippines was one of the first countries in Asia to declare an energy emergency because of what's happening in the Hormuz in the Strait of Hormuz. Um a couple days after that, the Marcos Jr. government announced that they were restarting talks with China about joint exploration in the West Philippine Sea in the South China Sea for offshore energy deposits. That's wild. The Philippines is a US defense treaty ally. We spent years worrying about the Duterte administration getting friendlier with China uh and doing exactly this. It took just a couple of weeks and this war of choice in Iran for the Philippines to start looking at at China and saying, "Huh, maybe we should have a more pragmatic relationship with China."”
Develop a macro viewpoint, create scenarios for it, and test claims against reality while staying disciplined to that thesis even when distracted by headlines—this is the framework for navigating macro crises.
“Develop a macro viewpoint, uh create scenarios for that, and then start to see is this true or is there or is this not true? Even with all the doom and gloom that I've talked about here, I'm optimistic. I'm looking for opportunities to deploy capital in technological innovation in the energy revolution in electrification uh and in the the recession of US global power into a multipolar world and the markets that are best posed to benefit from that.”
The asymmetry of advantages in the Iran conflict go in Iran's favor, making it impossible for the United States to achieve military objectives through firepower superiority because Iran controls the Strait of Hormuz and possesses cheap, distributed asymmetric weapons that the US cannot fully neutralize despite superior fighter jets and interceptors.
“It literally did not come into my imagination that this would be a longer war, that this would be a war for longer than 3 to 4 weeks because the asymmetry of the advantages here go in Iran's favor.”
Over a 3-5 year time horizon, the Iran crisis is an accelerant of deglobalization and multipolarity trends that were already underway, making it exacerbate existing movements toward supply chain securitization, food sovereignty, and semiconductor self-sufficiency rather than creating new disruptions.
“We were already moving towards deglobalization. We were already moving towards multi-polarity of supply chains. We were already seeing the securitization of things like food and semiconductors and feedstocks. All these things becoming part of the conversation about national security and countries that can uh protect those supply chains or make themselves self-sufficient in them, you were seeing those moves anyway. And so, I think over a 3 to 5-year time horizon, um all that's happened is an acceleration of those trends that we were already watching. So, it's a an acceleration of deglobalization. It's an acceleration of multi-polarity.”
The United States has no compelling geopolitical reason to be involved in the Iran conflict since the shale revolution made the US a net exporter of crude oil and LNG, removing the energy security justification that existed for the second Iraq War.
“There's no reason for the United States to be messing around the Strait of Hormuz. Uh since the shale revolution, the United States is a net exporter of uh of crude. Uh it's it's been keeping the lights on in Europe by exporting LNG. Yes, there are still global economic exposures based on the things that are blocked out of the Strait of Hormuz, but there's no compelling reason to be obsessed with Persian Gulf oil if you're the United States, which took another geopolitical reason off the board to engage in this conflict.”
LNG supply disruption is more concerning than oil disruption because LNG cannot be rerouted through alternative pipelines like oil can through Yanbu, and Europe was expecting new LNG capacity from the Middle East to compensate for lost Russian supply.
“LNG is a is different because you're not piping LNG to Yanbu across um across the desert. Um and Europe really like Europe was depending on access to all the LNG capacity coming online out of this by getting that's how they were going to balance the lack of supply that was coming from Russia.”
Trade disruption will hit emerging markets and countries with low fiscal buffers and no strategic reserves disproportionately hard, while causing relative degrees of pain depending on energy self-sufficiency.
“Usually it's your emerging markets, your countries that have lower buffers, that don't have strategic reserves, um, that are already constrained from a fiscal position. Those are the countries that are going to be front and center, and then you'll get relative degrees of pain depending on where you are and what your self-sufficiency is.”
The Trump administration believes the United States is safe from supply disruptions because of the shale revolution and oil independence, but this is a 'facile and feeble' misunderstanding because the US economy is exposed to global supply chains even if it doesn't import Persian Gulf oil directly.
“It is obvious to me that President Trump and this administration is thinking that the United States is safe from this because of the shale revolution and because the United States is not dependent on importing um oil and LNG from the Persian Gulf. And it's just such a facile and feeble point of view. Um you can argue that the United States needs to make America great again and near shore or reshore all this industrial capacity back to the United States and everything else. Cool. It hasn't happened yet in the year of our Lord 2026 and this supply chain disruption is here right now. The United States is exposed to the global economy.”
The energy transition is fundamentally different from coal-to-oil because we are transitioning from oil to 'everything else' (wind, solar, geothermal, nuclear, plus unknown future technologies), making it a more complex and uncertain investment landscape than a single-source replacement.
“We're not going from oil to something else. We're going from oil to everything else. So it's going to be wind and solar and geothermal and nuclear and probably things that haven't even been invented yet. So does that mean that you invest in the energy technologies themselves? Does that mean you invest in the picks and shovels that build the energy themselves? Is this a story about electrification and the grid and everything that it has to do to support this? Is it all the above?”
Israel does not care about the timeline constraint because it views Iran as an existential threat and would prefer regime change or chaos/obliteration, and Israel is relatively well-positioned to absorb economic costs due to its offshore gas discoveries reducing energy vulnerabilities.
“Israel cares that um this rival that has threatened to wipe it off the map. So I'm not describing a value judgment here, but Israel views Iran as an existential threat and all it wants to see, if not regime change, then it will take chaos and obliteration. Like that is a net positive from Israel's point of view. It will deal with the economic tech catastrophe that comes and Israel is a country that is relatively well off. Um ever since their discovery of offshore gas, um it's removed one of their key vulnerabilities in terms of inputs and they're actually in a pretty good position.”
Russia's invasion of Ukraine transformed Russia from a great power into a Chinese gas station, meaning Russia now has limited geopolitical independence and is dependent on China for strategic survival.
“Remember, when when Vladimir Putin invaded Ukraine, all he did was turn Russia from a great power into a Chinese gas station.”
Traditionally defined alignments ('West vs East') are breaking down; France aligned with China and Russia in UN Security Council votes during the Iran crisis, demonstrating that countries are pursuing pragmatic bilateral relationships rather than adhering to Cold War alliance structures.
“you had them trying to vote about whether to uh intervene with with with outright force or not and you saw actually, you know, France aligning with China and Russia for example. So, these these traditional lines of you know, the West versus the East or however where you want to define it just don't seem as consistent anymore.”
China shifted from 'Wolf Warrior diplomacy' in the late 2010s to pragmatic partnership and accommodation, realizing it was not as strong as it thought and needed to be more accommodating to be a successful long-term power.
“I think Xi Jinping also realized um towards the end of the 2010s and into the early 2020s that he made a mistake. Uh, he thought China was stronger maybe than it was. You had the Wolf Warrior diplomacy happening all over the place and China starting to, uh, bear its teeth a little bit. Um, and I think he was able to walk that back and see that China wasn't quite ready for that. That China needed to be more accommodating, that it needed to be a pragmatic partner, and that there was actually an opportunity in US political volatility and instability to be that.”
Global supply chains are currently optimized for a perfectly-functioning globalized free-trade world of the 1990s and are thus highly brittle when confronted with current geopolitical fragmentation, creating cascading failures when alternative routes are disrupted.
“The thing about free trade, the thing that makes it efficient that the bulls will say about free trade is yeah, that's exactly how it's supposed to work. You produce what you need when you need it for the cheapest price possible in the geographies that are most optimized for that production. And that's the way a lot of supply chains are, even though the world is moving multipolar. Lots of supply chains still function like it's a globalized world. So when you have this kind of crisis and this level of supply chain disruption, you're dealing with supply chains that are expecting a perfect globalized free trade world of the 1990s and instead they're getting this version of multiplicity and regional warfare and return of great power politics of 2020s.”
The US attempt to cut off Chinese oil by strategically disrupting Venezuela and Iran actually hurts US allies (Japan, South Korea, India) more than it hurts China, because China has Russia as a neighbor and more renewable capacity, while allies lack alternatives.
“We fought over Japan, South Korea, uh India way more than we did China. Remember, when when Vladimir Putin invaded Ukraine, all he did was turn Russia from a great power into a Chinese gas station. So, China's got Russia right next door. Um China I'm not saying that China's energy secure, but they have more reserves, more renewable capacity online, and a relationship with Russia. That is not something that your Japans and South Koreas um and Indias can say. So, in that sense, okay, if you're trying to hurt uh China with that 5D chess, you actually hurt your allies much more.”
China plans to take Taiwan through economic and political isolation (like it did Hong Kong) rather than military invasion, and is not going to invade Taiwan now despite the US being distracted in Iran, because it is playing a longer-term strategy.
“They're thinking about Taiwan the way they thought about Hong Kong um in the '70s and '80s. They want to isolate it economically, they want to isolate it politically, they want to get to the point where nobody cares enough about Taiwan so that when they announce that they are taking it, nobody puts up a fight to stop them, which is exactly what happened with Hong Kong.”
By 2030-2035, energy will likely be deflationary due to the scaling of renewable capacity, which will benefit all downstream sectors and create a secular tail wind for economic growth.
“It's really just you want the companies that are going to benefit from, and it's hard to think about this in 2026, but cheaper energy? Because by 2030, 2035, probably energy is deflationary, no matter what's happening in the Strait of Hormuz.”
Fertilizer supply disruptions have immediate and severe consequences because farmers have already missed the planting window for many regions, locking in lower yields for this year and rising food prices 6-9 months out, with potential for political instability in emerging markets similar to the Arab Spring.
“Fertilizer is really only relevant one or two times a year based on when farmers are planting and when they need the fertilizer. And so that's when the supply chain is there for them. We already missed the window for many farmers throughout the world to apply fertilizer. So you can book in now lower yields in many parts of the world um and rising food prices in those parts of the world. And we won't know the full impact of that from 6 to 9 months till now.”
Physical shortages are starting to show up in East Asian economies due to Strait of Hormuz disruption, and if the conflict continues for another month, these shortages will move from East Asia to Europe and the Western Hemisphere.
“Physical shortages are starting to show up in East Asian economies. And if we keep going on this path, if we are still here in a month talking about this, we'll be talking about the shortages moving from East Asia to Europe, um even to the Western Hemisphere.”
China is using pragmatic economic partnerships and political accommodation to outcompete the US, as evidenced by Mark Carney's statement at Davos that China is a more reliable partner than the US.
“It's been very successful over the past couple of years. Uh, remember the biggest geopolitical story of this year before the war, um, was not Venezuela, was not Greenland, was Mark Carney going to Davos and saying, 'I'm taking the sign out of the window. I think China is a more reliable partner right now than the United States is.' And we have to think about Canadian national self-interest in that context. That's a huge diplomatic win for China that it has been able to seem more stable and more accommodating in a global international political system to a country like Canada than the United States.”
Japan's deployment of long-range missiles and increased military capacity in the East China Sea represents friction with China that has prompted China to announce control of airspace over disputed zones during unspecified military activities.
“Before the war started, you had a huge diplomatic dustup between Japan and China. The Takaiichi government uh really pushing China's buttons on Taiwan and some of these things. And Japan has been deploying long-range missiles and military capacity to places that China doesn't like. And so, China has announced, "Oh, okay, well, now for the next 40 days, we're going to be controlling airspace in areas of the East China Sea as we do some things that we're not going to tell you about.”
Mid-to-lower tier petrochemical products (plastics, polymers) are experiencing severe shortages with prices doubling and tripling or products becoming completely unavailable, and these products lack strategic reserves because governments did not anticipate supply disruption needs for them.
“In my rolodex, the folks that are freaking out are those ones for um those mid to lower tier petrochemical products that you would think are boring, like the plastic that's in everything uh in your life, which you're seeing doubling and tripling of prices or you're seeing companies that are saying I just I can't get it. Like it's not available um for any price or I have to go to China or I have to go to some weird place before that maybe that's going to run a foul of global sanctions in order to in order to get it.”
Europe could use the crisis as a catalyst to reform its institutions and energy strategy, particularly by reducing Hungary's veto power and making decisions as a united bloc rather than being held hostage by individual members.
“I think the EU will do that. You can make a very compelling case that they won't and that I'm just whistling into the wind here, but that I think is a block that could use the the impetus of this crisis to do things that people today maybe aren't appreciating as possible.”
China has been preparing for supply chain independence for years by rolling out renewable capacity, driven by lessons from observing US interventions in the Middle East and a strategic determination to avoid energy blockade vulnerability.
“China I think as well has been preparing for this for years. Who's leading the world in terms of rolling out renewable capacity? It's China. China's not doing that because it makes sense from an economic perspective to do so. That is because the communists on high said, 'We will do this because we watched the Americans in the Middle East for 20 and 30 years, and we don't want to participate in that.'”
There are credible open-source reports indicating that the IRGC has implemented a tolling system where ships pay in yuan to transit the Strait, with fees based on country rankings reflecting how close nations are to the United States.
“You have reputable sources that are saying that at least some ships are paying a toll and that they're paying the toll in yuan to get through. Um and that the that the IRGC has a system for doing this, that they have country rankings based on how close they are to the United States or how uh Iran views um their relationships with that country, and that affects the fee that you have to pay.”
Trump's approval ratings on economic handling have collapsed to Biden 2022 levels, making domestic political constraints suggest he would change course to avoid midterm disaster, but his behavior suggests he genuinely believes tariffs worked and America is experiencing a 'greatest economic renaissance.'
“Trump is at terribly low approval ratings, and even worse for him, he's at a terribly low approval ratings on his handling of the economy. No matter what people thought about him, he always got good ratings on, 'Oh, this guy is going to handle the economy better than Joe Biden or Kamala Harris or Hillary Clinton or any of these others.' Those numbers are now where they were at for Joe Biden in 2022.”
Markets are 'sanguine and almost delusional' because the disconnect between financial markets (equities near all-time highs) and the physical economy (real shortages in Asia) has never been more obvious, indicating a lag in market pricing.
“Markets have been sanguine and and almost delusional from my perspective. The disconnect between markets and the physical economy has never been more obvious because the physical economy, especially in places that were over um overly dependent on the region for a lot of these things, the physical economies are starting to show the cracks.”
At short-term time horizon (days to weeks), the only metric that matters is the actual count of ships going in and out of the Strait of Hormuz, not political rhetoric or deadlines, as this reveals the true state of the market and whether the crisis is resolving.
“But all that really matters right now is how many ships are going in and out of the strait.”
The best-case scenario coming out of the conflict is some type of tolling structure—either purely Iranian or an Iran-GCC combo toll—that returns certainty to transiting the Strait of Hormuz, which would represent a fundamental shift away from US Navy guarantees of maritime security.
“The best case scenario coming out of all of this is some type of tolling structure, uh whether it's wholly Iran or whether it's some kind of Iran GCC combo toll um that returns certainty to transiting the Strait of Hormuz.”
Ukraine is watching Iran's asymmetric advantage (disrupting oil supplies to affect global politics) and may shift strategy to target Russian oil export infrastructure instead of domestic energy infrastructure, to inflict greater global economic pain and force international attention.
“Ukraine is watching everything that's happening in the Strait of Hormuz and I imagine that Zelenskyy, you know, I'm imagining here. I don't I don't know this for sure but I imagine Zelenskyy's watching the situation and watching Iran's asymmetric asymmetric advantage work and thinking to himself, 'Oh, if I can affect the global price of oil or petrochemical supply chains or things like that, people will listen to me even if I'm being blown up by the the States and Israel even though my my air force is gone and everything else like that.'”
The historical analogy for the current period is the 1890s, not the 1930s, because the 1890s featured rising and falling great powers, generational energy transition (coal to oil), major technological innovation (electricity), and modern fertilizers—all without inevitable world war, whereas the 1930s framing suggests inevitably catastrophic conflict.
“I think the right frame of reference, and it's not a perfect historical historical analogy, but is the 1890s. Because you had rising and falling great powers. You had uh a generational shift in energy from coal to oil. Um you had technological innovation. You had the roll out of electricity over a 20-30 year time horizon, which changed everything. You had the advent of modern fertilizers, which for the first time disconnected population growth from just how much you could grow in your own regional market. Um it was an absolutely transformative time.”
Shapiro is opting out of engaging with Trump's reality-TV-style announcement cycles and political theater about negotiation deadlines, instead focusing on physical metrics (ship counts, jet fuel prices) that reveal actual market conditions.
“I'm opting out of the reality TV show presidency. I I stayed up late what was that Friday or whatever he was doing the White House press you know the press conference from the Oval or from the White House or whatever it was because he was going to make some announcement it wasn't going to be ground troops and it wasn't it was just President Trump being President Trump. And he has a knack for creating these inflection points these moments where everybody is talking about him and everybody's focused on this thing. I'm not buying it.”
Over a 5-10 year horizon, Shapiro is optimistic about the global economy despite supply disruptions because multipolarity and deglobalization will be transformative rather than purely destructive, creating opportunities for countries positioned with cheap energy, security, and technology.
“I'm still very optimistic about the global economy over the next 5 to 10 years. I think a lot of the dynamics that we're talking about, they will be bad for some people, they will be great for others. They will be bad for some industries, they will be transformative for others.”
Shapiro initially expected the US would not invade Iran because he believed US policymakers understood the invasion would fail militarily and produce unacceptable economic consequences, but he was wrong because he underestimated US commitment to the conflict.
“I didn't think that the United States was going to undertake this war... I thought they knew that the implications would be uh well, I didn't even think catastrophic. I thought that they knew that it would be a short-term war and that they probably wouldn't be able to achieve their objectives. It literally did not come into my imagination that this would be a longer war.”
The real story worth analyzing is technological innovation and energy transition (AI, robotics, automation, renewable energy, electrification, Internet of Things), not daily geopolitical headlines, because these determine long-term prosperity.
“I have to keep in touch with everything that's going on and the headlines on a daily basis. I find it truly annoying because the real stuff is happening in technological innovation. What is AI doing? How is it transforming our lives? How is it transforming productivity? What is next with robotics? What is next with automation? What is next with Internet of Things? Changing everything.”
The United States will weather supply chain disruptions better than most on paper due to fundamental factors (energy independence, food production, technology capacity) but political brittle ness (voters seeing higher gas prices and inflation at the pump) creates acute political constraint for the administration.
“The United States is exposed to the global economy and yes, maybe the United States has some fundamental factors that mean it can weather it on paper a little bit better. Uh but Joe Biden learned just how hard it is to weather things on paper versus when people are at the gas pump and being like, 'Hey, it's $5 to pump at the gas tank.'”
Countries like Chile are positioned to benefit from multipolarity due to geographic isolation from conflict, cheap renewable energy access (solar, wind, geothermal), and potential to become data center and robotics hubs.
“Say a country like Chile, which is far away from geopolitical zones of conflict which can have incredibly low cost of energy because of the solar, wind, geothermal potential that lies there. And so, that's going to be an ideal case for you to do things with data centers or internet of things or automation or robotics and things like that.”
France and Spain, unlike Central/Eastern European countries dependent on Russian energy, have alternatives and wealth that allow them to adapt to supply disruptions without catastrophic outcomes.
“That's not the story of France. That's not the story of Spain. That's not the story of some of these other countries and they exist not I mean, I wish it was a confederation. It would make it easier, but they exist in this European Union.”
Neither Iran nor the US currently appears to believe they have achieved their objectives based on their rhetoric and behavior, suggesting negotiations may be happening but neither side is ready to exit.
“if you're just reading the plain um objectives of both sides I don't think Iran feels like it has caused enough pain to the global economy to reestablish deterrence and I don't think the United States is acting like a country um that is able to declare mission achieved or you know mission objectives achieved quite yet.”