What the closing of the Strait of Hormuz means

The Strait of Hormuz has been disrupted, oil prices have surged and global energy security is once again fragile. These are not isolated shocks. They are signs that the assumptions behind the modern global economy, including open seas, stable trade routes and frictionless globalisation, are breaking down.

For decades the free movement of goods, capital, people and information formed the backbone of the liberal economic order that dominated the world from the late 1970s onward. Countries embraced free trade, deregulation and global integration. This system created economic growth and connected markets across the world, but it also weakened local industries and left many workers in Western countries behind. Entire industrial communities declined while wealth became increasingly concentrated.

Political orders can last for generations, even when governments change. The neoliberal order replaced the older post war economic system and became the accepted model for leaders across both the left and right. Leaders such as Ronald Reagan, Margaret Thatcher, Bill Clinton and Tony Blair all governed within the same broad economic framework. But the system depended on stable global trade and predictable international cooperation. Events such as the disruption of the Strait of Hormuz show how fragile those assumptions have become.

The backlash against globalisation has been building for years. Brexit and the rise of Donald Trump reflected growing anger in regions that felt abandoned by free trade and open borders. The 2008 financial crisis exposed weaknesses in deregulated markets, while recent years have seen governments return to tariffs, industrial policy and efforts to bring supply chains back home. Free trade is no longer treated as an unquestioned principle. Instead governments are increasingly focused on economic security and national resilience.

What is emerging now is not a new stable world order but a fragmented and uncertain one. Power is shifting toward a more multipolar system shaped by the United States, China, Russia and regional blocs such as the European Union. Trade routes are becoming contested and geopolitical conflict is once again shaping the global economy. The disruption of the Strait of Hormuz is not an isolated crisis. It is a warning that the liberal order which defined the last forty years is ending.

What comes next?