Sanctions Become Strikes: The Dangerous Fusion of Financial and Military Power
Israel, Iran and the Future of Dollar Hegemony
Key Insights
Israeli strikes on Iran’s South Pars gas field in targeted Chinese energy supplies – the first military enforcement of dollar hegemony
Giovanni Arrighi’s theory of hegemonic decline predicted this: dominant powers go from production to finance to coercion as their power wanes
China’s sanctions-evading oil trade with Iran – 1.5–1.7 million barrels daily through a 300-vessel dark fleet – created physical vulnerabilities that Israel exploited
The dollar’s share of global reserves already fell from 71% (2000) to 57–59% (2024–25), accelerating after America froze $300bn in Russian reserves
Taiwan represents the ultimate convergence: where semiconductor supply chains, financial systems and military strategy become inseparable
When Israeli jets struck Iran’s South Pars gas field in June 2025, they didn’t just hit energy infrastructure – they destroyed the physical foundations of China’s decade-long project to buy oil outside the dollar system. The message was unmistakable.
This wasn’t sanctions enforcement. It was something new and far more dangerous: the militarisation of the global financial system.
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