If we zoom out beyond the immediate crisis in the Strait of Hormuz, a larger pattern becomes visible that has been building for years: global capital is increasingly looking beyond the United States.
In the past few years, global investors have repeatedly confronted a question that once seemed unthinkable: whether US government bonds still deserve their status as the world's safest asset. It began in 2020–22, when pandemic-era government spending in the US pushed its budget deficit to a record high. The inflation that followed drove up interest rates and pushed down US government bond values – the assets that global investors relied on to protect their portfolios when other markets fall. In 2024–25, President Trump's attacks on central bank independence and his extreme import tariffs reinforced the same dynamic. In 2026, US military escalations against Iran, Venezuela and Greenland have brought some foreign investors to the point of considering shedding US assets altogether.
Two signals have emerged in 2026 that confirm this narrative.
The first comes from the Gulf. Against the background of Iranian officials stating that any institution buying US government bonds is financing the war, Gulf sovereign wealth funds, which hold trillions in US assets, have reportedly been in dialogue about cutting back their investment commitments to the United States, to bring capital back home.
The second comes from Europe. Since the Greenland crisis, more institutional investors are actively choosing European government bonds over American ones. This is not a rotation driven by the expectation of higher returns. It is a repricing of trust: a slow but accelerating loss of confidence in the reliability of the United States that has been building for many years.
As the war in the Middle East continues to push up prices for oil and gas, two countries find themselves relatively well positioned – because they have been preparing for this scenario for decades: France and China. Both have pursued energy security through a mix centered on nuclear power and renewables, reducing their structural dependence on imported oil and gas.
For France, the vision dates to the 1973 oil crisis. Before it, France imported around 75% of its energy and had almost no domestic fossil fuel resources of its own. The response was the Messmer Plan of 1974 – a state-directed mobilization to build out nuclear capacity at a scale that remains unmatched in the Western world. Fifty years later, that bet is paying off.
In China, decades of industrial policy have been shaped by a refusal to become dependent on imported oil and gas – a vulnerability that Chinese planners call the "Malacca Dilemma": the risk that foreign powers could strangle Chinese energy supply by blocking maritime routes (like the Strait of Malacca, or currently, the Strait of Hormuz). Coal, despite its pollution, remains China's dominant energy source today, but explicitly as a bridge, not a destination. The destination is a mix of nuclear and renewables on a scale the world has never seen: more than half of all nuclear reactors currently under construction are in China, and China installs more solar capacity each year than the rest of the world combined.
The irony is that two very different political systems arrived at the same conclusion through the same logic: that the energy mix of nuclear and renewables is not merely relatively good for the environment, but offers energy security for the nation.
Most people expect the war in Iran to end within days or weeks - much like the predictions surrounding Ukraine in February 2022. But a weak regime does not guarantee a short war. It merely means a more unpredictable outcome.
As we wrote in January, the weakening of the Iranian regime has opened a contest for control of the region. Israel, Turkey, Saudi Arabia, the United Arab Emirates, and Qatar are all vying for influence - and none of them want the same outcome in this war. Israel and Turkey were already at odds: former Prime Minister Naftali Bennett publicly framed Turkey as a threat on par with Iran. Now Israel is at odds with the Gulf states, whose entire economic model depends on the war ending immediately.
For decades, the Gulf states built their global standing on a single promise: whatever happens in the Middle East, the Gulf remains stable. That promise has now been broken. Missiles have struck Dubai's airport and hotels and killed civilians in Abu Dhabi. Thousands of travelers are stranded across the region - unable to fly home or forced to pay a massive premium to flee via Riyadh. Within days, the Gulf's reputation as a safe haven is already in serious doubt.
