The Return of the Margins: A Regame of Sea Power, Energy, and the Dollar

Title: The Return of Rimland
Author: ALEXANDER CAMPBELL
Translation: Peggy, BlockBeats

Original author: Rhythm BlockBeats

Original source:

Repost: Mars Finance

Editor’s note: Ceasefire, blockade, and then threats of tariffs—this conflict surrounding Iran has not subsided; instead, it continues to spill over. From the Hormuz Strait to the Red Sea, from energy corridors to trade order, the core of the situation is no longer about localized military confrontation but a systemic game over “who controls the flow.”

This article uses the “Rimland” strategy as a thread, pointing out that the U.S. is attempting to shift the conflict from a regional issue to a global one through maritime blockade and energy pathway restructuring, involving China. As sanctions and interception measures escalate, the confrontation originally centered on the Middle East is transforming into a structural shock affecting global energy, supply chains, and financial systems.

More critically, markets have not yet fully digested this “chain reaction.” The immediate fluctuation of oil prices is just the first step; the transmission to liquidity, tech investment, consumer spending, and even agricultural supply has only just begun to manifest. After the energy price revaluation, the real test is how the global economy can withstand the second round of shocks triggered by this.

This means that the current issue is no longer whether the conflict will escalate but along which paths its impacts will spread and when markets will start to price in these yet-untested risks.

Below is the original text:

Alright, the situation is now laid out before us.

The tension we proposed last Wednesday has now been proven to be irreconcilable.

Iran wants nuclear weapons and control of the strait; and Trump cannot accept either of these. How far apart are these two “goal circles”? To the extent that even Israel’s war with Lebanon has not been included in the discussion agenda.

I won’t claim to be highly accurate in my judgment, but perhaps we have indeed entered the “mid-game.” This is not a conflict that can be stopped in an afternoon. The core question is very simple: who will control the world’s most important waterway? And, is Iran’s threat to neighboring countries enough to exchange for bargaining chips for nuclear negotiations?

That is the key.

And what is becoming clearer now is a whole set of strategic pathways. Readers who have followed from “Fighting for the Dollar” to “Don’t Take the Bait,” then to “Awakening the Hegemon” and “Fragile Peace” should already see the pattern.

Trump is executing a “Rimland” strategy.

Intercept shipping. Threaten to impose a 50% tariff on all countries providing weapons to Iran. Instead of attacking the heartland, control the maritime energy routes to pull China into this game. For each mine laid by Iran or attack on a tanker, retaliate tenfold—seize their ships, control the oil tankers, and directly sell their crude oil.

Settlement in dollars.

Then comes the Abraham Accords. Saudi oil is transported via Jordan to Haifa port; the Trans-Arab Oil Pipeline (Tapline) is reactivated. A corridor made of physical infrastructure is connecting coastal countries into an energy network, completely bypassing the “heartland.” This is a “rimland alliance” built with pipelines and steel.

In my view, the reason we have come this far largely stems from this process itself—Iran (and China) through Hamas’s actions on October 7th, igniting Israel and disrupting this normalization process; and once this process advances, it could have formed an alternative trade route bypassing the Hormuz Strait and even the “Belt and Road.”

This also explains the disagreements between Washington and Brussels. The U.S. feels the weight of responsibility; Europe seems to believe it can secure its energy channels through private negotiations while letting the “older brother” bear the costs of conflict. France, on one hand, blocked relevant UN Security Council resolutions, and on the other, negotiated bilateral arrangements for strait passage, calling for the formation of an “independent national alliance.” This is a typical “heartland” mindset: trading with inland powers, avoiding direct conflict, as if maritime routes will sustain themselves.

Trump has just closed this loophole—thus turning America’s problem into the world’s problem.

As of writing, crude oil prices have risen over 6%, stock markets have fallen about 1%, and the gains from last week’s ceasefire seem likely to be quickly erased. I bought some VIX call options last weekend, so you could say I have some bias.

How the situation develops next depends on a series of more fundamental issues:

· Will the ceasefire hold for another week, or will it break down in a “reverse deduction”?
· Trump has announced plans to intercept ships paying “tolls” to Iran—does this include Chinese ships? What will happen when they try to load crude at Kharg Island?
· He also reiterated the threat to impose a 50% tariff on any country supplying weapons to Iran—does this mean a trade war is back on the table?

Then comes Iran’s countermeasure: it may activate the Houthi forces, which still have the capability to make the Bab el-Mandeb Strait difficult to pass. Notably, most oil tankers transporting oil via the east-west pipeline from Saudi Arabia cannot pass through the Suez Canal—these are ultra-large crude carriers (VLCCs). If the Houthis escalate their actions, the impact will not only be on Red Sea shipping but will force these key oil-carrying giant tankers to reroute along longer paths.

The main thread is: this conflict continues to expand in scale and spillover.

By escalating actions to fully intercept all ships paying “tolls” to Iran and reiterating tariff threats, Trump has explicitly drawn China into this game. China has been stockpiling crude oil for years precisely to prepare for such scenarios. But against the backdrop of a real estate drag on the economy, how long can China’s market remain “calm”? And how likely is it to escalate confrontation to ensure energy supplies?

From Venezuela to Iran, this sequence of actions increasingly resembles a deliberately designed strategy.

The “Rimland” is returning.

Next, are the chain reactions at the market level:

· How bad will Monday’s opening be? The initial decline mainly comes from short-term funds and retail investors buying put options. When will long-term funds start to see volatility as uncontrollable, forcing them to sell or hit risk limits?
· Last week, hedge funds quickly rebalanced their “long AI hardware, short software” positions. But with oil prices rising, bonds falling, liquidity tightening, and the Gulf helium supply chain risk (a key raw material for chip manufacturing) added, is this enough to reprice expectations for the AI acceleration cycle?
· Before the conflict, the U.S. economy grew almost zero in Q1. As energy prices soar, household disposable income is swallowed by gasoline, heating, and aviation fuels—will families cut spending or leverage further?
· The Federal Reserve minutes show that policymakers are discussing tightening policies to cope with energy-driven inflation. A new round of debate on “how to respond to negative supply shocks” is underway. Given such a scale of energy shock, can the Fed still “choose to ignore”?

Ultimately, these questions point to a larger “chain reaction.”

The “Rimland” strategy addresses energy and the dollar but does not solve the entire system supported by energy. The market is currently only pricing the “first node” and has not yet transmitted to the “second node.” Oil prices can quickly revalue due to news, but agricultural cycles will not. Urea prices remain at $700, and the USDA expects wheat planting area to hit a new low since 1919—this will not reverse just because two diplomats shake hands. Farmers who couldn’t afford fertilizer in March cannot “replant” in April.