Richard Wolff and I examine Washington’s claim that it has deliberately shifted from military attacks on Iran to economic pressure. The military campaign failed to reopen the Strait of Hormuz or force Iran to surrender, but that defeat is now being presented as a strategic pivot towards bankrupting the Iranian economy.

The problem is that Iran has spent more than four decades adapting to sanctions, restricted credit and limited foreign borrowing. The West is far more debt-dependent. Higher oil prices are weakening currencies across Asia, increasing import costs and forcing governments such as Japan’s to borrow dollars rather than sell their US Treasury holdings.

This financial support protects American bond markets while increasing other countries’ dependence on Washington. At the same time, pipeline proposals cannot replace the Strait’s energy trade, and Chinese restrictions on rare earths obstruct American rearmament. The attempt to bankrupt Iran may instead expose the financial fragility of the United States and its allies.