Iran ceasefire: Worst phase of Hormuz conflict yet to come, warns Ray Dalio

New Delhi: American billionaire and investor Ray Dalio has said that the worst and most consequential phase of the Iran conflict is still to come, warning that a climactic “final battle” for control of the Strait of Hormuz will determine not just the outcome of the current war but the long-term credibility of American power and the stability of the dollar-led financial order that underpins it.

Founder of Bridgewater Associates, Dalio on X shared an article and highlighted all parties to the conflict understand the battle has not yet been fought.

“Both sides know that the final battle, which will make clear which side won and which side lost, still lies ahead,” according to him.

He dismissed the prospect of a negotiated settlement outright, saying agreements in this context are “worthless” and that whatever happens next is likely to be “the worst phase of the conflict.”

Dalio framed the entire conflict around a single, easily measurable test — whether the United States can guarantee safe commercial passage through Hormuz.

He said there is “near-universal agreement” among government leaders and geopolitical experts he has consulted that any outcome short of that, including one that leaves Iran with even residual negotiating power over the strait, constitutes a US defeat.

He warned that the consequences of such a defeat would be severe and self-reinforcing, like damage to Gulf allies, disruption to global energy markets, erosion of allied confidence, and a challenge to the dollar’s reserve-currency status as capital flows shift toward the perceived winner.

Drawing on his study of five centuries of imperial cycles, Dalio said a US failure to secure Hormuz risked becoming for America what the 1956 Suez Canal Crisis was for Britain, a single, public demonstration of overextension that permanently recalibrated how allies, adversaries, and creditors viewed the dominant power.

He also pointed out that the same pattern had played out for the Dutch Empire in the 18th century and the Spanish Empire in the 17th , a perceived lesser power challenges control of a critical trade route, the dominant power fails to hold it, and financial and geopolitical flows rapidly reorganise around the new reality.