Trump says prices will come back down. OK when?
Oil Bottleneck Threatens the Global Economy
The Wall Street Journal reports Strait of Hormuz: The Oil Bottleneck Threatening the Global Economy
As of Wednesday, day five of the war on Iran, several thousand ships were stuck inside and outside the Persian Gulf, trapping roughly a fifth of the oil and liquefied natural gas the world consumes each day. The blockage is cascading through the region’s industry as storage tanks fill up with oil that can’t set sail, forcing producers to slash output.
The problem is most acute in Iraq, the world’s fifth-biggest producer. Output has more than halved, oil officials in the country said, with cutbacks at the southern Rumaila and West Qurna 2 fields.
The cost of chartering tankers to transport oil from the Persian Gulf has rocketed and now equates to 20% of the price of a crude cargo, compared with 3% in normal times, according to Argus Media analysts.
Cutbacks prompted by dwindling storage compound disruptions from Iranian attacks on regional energy infrastructure, which prompted Qatar’s national producer to stop making liquefied natural gas.
In another sign of U.S. concern, the Navy sent a message to tankers Wednesday morning saying they could ask for assistance if they wanted to sail through the Strait, said shipping executives with tankers stuck in the Gulf.
Traders questioned whether the U.S. would be willing to put expensive naval ships in harm’s way. They are currently positioned outside the Gulf, distanced from Iranian missiles. Even if U.S. ships conducted escorts, the market wouldn’t return to normal, possibly functioning in daylight hours only.
“Practically, it is very difficult for any navy to escort ships through that narrow strait,” said Ellis Morley, specialist in cargo and commodities at Howden, an insurance broker. “That horseshoe shape of the Strait keeps ships in the most dangerous area for a long time.”
Saudi Arabia has abundant storage capacity, as does the U.A.E. Elsewhere, however, tanks are filling up.
By Tuesday, Iraq had enough space to store the volume of oil it typically exports through the Strait every three days, according to JPMorgan Chase analyst Natasha Kaneva. Unless the Strait opens, 3.3 million barrels of daily production in the region could be lost by early next week, she calculates—roughly enough to supply Japan.
“If Hormuz remains effectively closed, supply losses would accelerate,” Kaneva said.
22 Percent of Global Supply Is Offline
Cost of Chartering a Tanker
See the Strait of Hormuz Shutting Down
Traffic in the Strait of Hormuz grinds to a halt.
Iran Conflict May Push Up Oil Prices for Americans
The Washington Post reports Trump Concedes Iran Conflict May Push Up Oil Prices for Americans
President Donald Trump acknowledged for the first time on Tuesday the economic toll for Americans of his assault on Iran, saying that oil prices were likely to spike as a result of the fighting in the Persian Gulf but insisting they would eventually dip.
“So if we have a little high oil prices for a little while, but as soon as this ends, those prices are going to drop, I believe, lower than even before,” Trump told reporters in an Oval Office appearance alongside German Chancellor Friedrich Merz, after a reporter asked both leaders how worried they were about the rising prices of oil and gas.
Merz offered a more sober assessment of the war’s impact, saying that “this is of course damaging our economies. This is true for the oil prices, and this is true for the gas prices as well. So that’s the reason why we all hope that this war will come to an end as soon as possible.”
Disruption Risks Aren’t Over
Business Insider reports Trump’s pledge to keep oil flowing has calmed markets, but Wall Street experts say disruption risks aren’t over
Trump ordered the United States Development Finance Corporation to offer political risk insurance to guarantee the financial security of maritime trade in the Persian Gulf, in a Truth Social post made ahead of Tuesday’s market close. Trump also said the US Navy would escort oil tanks through the Strait of Hormuz.
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD,” Trump posted. His promises seemed to reassure Wall Street.
Goldman lifts oil price forecast
Goldman Sachs raised its second-quarter average oil price forecast to $76 from $66 on Wednesday, without mentioning Trump’s proposal.
CEO flags persistent industry worries
Stamatis Tsantanis, CEO of global shipping company Seanergy Maritime and United Maritime, told Business Insider that the maritime industry will likely need further pledges of support from Trump.
“The US commitment to support shipping through naval escorts and insurance backing is a welcome step, but many industry insiders remain cautious,” Tsantanis said, adding that ship owners need to see a secure corridor to pass through before confidence returns.
“The priority for the industry is not just moving cargo, but protecting the lives of seafarers, the value of vessels, and avoiding what could become a major environmental disaster if a tanker were seriously hit in such a narrow and sensitive waterway,” Tsantanis said.
Famed economist Mohamed El-Erian raised concerns that, just because the US is offering protection for ships in the Strait of Hormuz, that doesn’t mean shipping firms will opt to move cargo through the waterway.
Trump’s strikes on Iran could cost the American economy up to $210B
The Independent reports Trump’s strikes on Iran could cost the American economy up to $210B, report says
The U.S. war with Iran could cost the American economy as much as $210 billion, according to fiscal analyst Kent Smetters, director of the widely used Penn Wharton Budget Model.
The ongoing conflict is already driving disruption to trade, global energy markets, and gasoline prices, though it is difficult to precisely estimate how much the war will impact the economy, Smetters told Fortune.
His predictions currently estimate a $115 billion economic loss, though that figure could range between $50 billion and the upward bound of $210 billion depending on the nature and duration of the conflict.
Much of the economic impact of the war will depend on how long the conflict persists, according to analysts.
“Markets are right now really under-pricing the tail risk of a sustained engagement and an operation that does not wrap up quickly, restore travel through the Strait of Hormuz and get everything back to de-escalation and normal in a timely manner,” former Biden economic adviser and chief of policy and advocacy at the Groundwork Collaborative, Alex Jacquez, told The Associated Press.
At present, it is “not possible at this time to know” how long the U.S. fight, dubbed Operation Epic Fury, will last, according to a letter the president sent Congress.
Jet Fuel
If this bottleneck persists for over a week, we will see some serious jumps in the price of oil and gasoline.
Jet fuel is already rocketing.
If Iran lets selective tankers through the Strait of Hormuz say those headed to China. Which NATO military unit put an end to that notion?
Trump has now come out to insist that Iranian democracy, constitution, and republican institutions be damned, Iran’s new supreme guide (who’s job it is to watch over Islamic legal principles in the halls of government) should not be chosen by the council of experts nor be selected for proven competence as an Islamic legal scholar, but should be directly assigned by Trump himself.
Clownesque
There’s an additional angle.
Once you run out of storage, you need to limit production.
Depending on the technology & geology, shutting in production can permanently affect available production & reservoirs.
Ultimate recoveries can be up to 20% lower after an unplanned shut in…
Bad news all around.
That’s true, but the market is really about tradeable oil, not locally produced and consumed oil (oil produced and consumed on Mars is irrelevant).
Oil transiting Hormuz is upwards of ⅓ of all traded oil.
Taking Russian oil (10%) offline would cause prices to more than double.
(Such a great plan).
Taking 40% of the oil out of the market implies an oil price rise to 800% at a purported price-elasticity of -0.05
Of course it’s more complicated, because supply has a little elasticity (most of it in the Gulf !), it is buffered, and demand collapses as the economy crumbles, so over time results will vary. (It’s not an electrical circuit).
Gas Already Over a Dollar Higher – From $2.19 To $3.29
Yesterday – Colorado
Based on reports from early March 2026, Iran has indeed shifted its strategic focus toward “governing for a prolonged war,” a concept referred to by analysts as a strategy of “asymmetric endurance”.
This strategy, reported around March 3–5, 2026, marks a change in approach following coordinated, high-intensity strikes by the U.S. and Israel that began on February 28, 2026.
Here are the key elements of this reported shift:
Governing vs. Fighting: Rather than attempting to match U.S. and Israeli conventional military power, Iran is adapting its internal structure to function while under constant attack. This includes devolving powers to local officials to ensure state functions continue despite disruptions to central leadership in Tehran.
Asymmetric Endurance: The strategy involves accepting initial, significant damage to infrastructure and leadership, with the goal of outlasting the adversary. Iran aims to raise the economic and political costs of the conflict for the U.S. and Israel, hoping to force a ceasefire.
Decentralized Control: In response to targeted strikes on top officials, leadership, and communication infrastructure, Iranian authorities have delegated executive and economic decision-making to provincial governors.
“Governing” the Conflict: The approach focuses on managing the war’s impact on domestic stability, maintaining internal security apparatus, and managing the economy, rather than focusing solely on active battlefield engagements.
Retaliation Strategy: As part of this “long war,” Iran continues to use its remaining drone and missile capabilities to strike U.S. bases and energy infrastructure in the Persian Gulf, aiming to destabilize global energy supplies and increase pressure on Western powers.
This shift occurred amidst reports of the death of Supreme Leader Ali Khamenei and a widening conflict that has affected over a dozen countries in the region.
An ancient way of resisting.
From back when cities were sieged for months or years.
It seems that they have been under siege for centuries. All we are trying/doing is containing their ability to fight outside their country. But it is a civilization built upon a legacy of war.
Judging by the random stuff Trump et al are cranking out, we are in uncharted territory.
Typically something someone with no frame of reference would shout.
They’re flying by the seat of their pants, shifting narrative hour by hour, gambling desperately and doubling down.
Iran strategy appears to be to cut off world energy supply by hitting easy and vulnerable targets including more distant pipelines, apart from fields and storage facilities in the Gulf region. Very effective and may take months to come online again. Wreaking total havoc with world economy. Fertilizer production coming to a standstill in many countries – mass starvation only question of time. Water supply of Gulf area next target. No way all this infrastructure can be protected from drone and rocket attacks.
No wonder DC now acting like a chicken without a head.
THANK YOU VERY MUCH to those starting this. You’re getting what you wanted.
I drive a lot. Glad I got my suzuki 4 banger running after hitting a deer 2 years ago. Rear end went out of my Dodge truck. I have 2 of them. The other one had the rear end go out also. Neither have been driven hard. I’m selling this one it also has engine problems Junk piles.
I doubt that much of Iran’s drone and weapons manufacturing capacity has survived the thousands of US strikes. Our satellite and communication networks had a high majority of the targets identified before this began. Iran is facing the “Full Fury” of the US military with no limits of engagement.
Trump may not have planned this himself, but Israel and our military has been preparing for this scenario for four decades. Lists of targets were long and detailed. Priorities were clear, and lesser targets are actively being taken out.
Our trillions in war spending is devastatingly effective. Rest assured that Iran has been defeated and its military influence reduced to insignificance. They had no Hyper missiles or nucs that could hit America. They were more of a persistent and petulant child that just got bitch slapped back into the Dark Ages.
Don’t think that I am a friend of war or this action. I think war sucks and that every dollar we spend on the Department of War would be better spend on infrastructure, education research and the growth of competence and knowledge.
I’m most concerned about how we will be looked at by the rest of the world. China has gained many customers as Trump is isolating our nation while following the same pattern of a long list of nations that have harmed their economies through the isolationist pursuits of tariffs.
What world do you live in where we’ve defeated Iran? Did you really look at the footage of the burning tankers and destroyed infrastructure and conclude that?
Nothing says “prepared” like running out of ammunition and losing 3 jets to friendly fire.
I see what you are saying. Sure there is footage of burning stuff from early on launches, but it is hard to know what to believe when it comes to media. They get a loop and pound it in,
The three jets were shot down by our systems. Not one jet was shot down by theirs. In a theatre of this size? A statistical probability that something goes awry,
This is chaos now and Iran will remain in chaos as infighting will prevail due to the intense trauma that all Iranians and others in the region have experienced. People change when they are under the threat of death and it is not usually positive.
Since Balfour the Middle East has been chaos.
Hi so I actually keep very in touch with each thing hour by hour for shipping. You’re wrong. The strikes are continuing unabated and if you knew a single thing about how an f-18 works you’d know that it shouldn’t be possible for one with it’s IFF on to lock, much less kill, three friendly f-15s. You should probably buff up on military basics before coming to talk about that kind of stuff. Bellingcat has a very good live feed of these verifiable strikes.
Iran is structured like a hydra because this exact type of attack was anticipated. They will prosecute this war by focusing on the economic side and our inability to put boots on the ground. It’s been only a few days and we are already running out of interceptor missiles to deal with drones they have plenty of that are both easily hidden and cost nothing to make. So far there has been no infighting so to speak of and the IRGC seems surprisingly resilient, more than I even expected. They will realistically be able to hamper oil for at least a few months and that is being optimistic. If they’re truly dug in like the Taliban we will be forced to withdraw or put American boots down. The latter will face attrition probably exceeding Afghanistan or Iraq.
Now please tell me again: in what world are we winning?
I, for one, love the idea of bombing and killing people! Especially school children! Think of the suffering their parents go through. I’m really hoping millions fall into starvation. Just the thought of watching Muslim children starve brings happiness to my heart! Praise Jesus! Of course I wish we weren’t at war too. But if anyone knows what he is doing, it’s Donald Trump!
Thats truly dark… I hope you forgot that sarcasm font!
Even though I am aware that people actually do think like that.
https://www.maersk.com/news/articles/2026/03/04/middle-east-operational-update-4
Maersk: We are taking operational measure to ensure the safety of our personnel, safeguard your cargo and maintain service stability across affected trades in the Middle East. Following our latest risk assessment and operational review, the following decisions are being implemented:
We are temporarily suspending cargo booking acceptance in and out of UAE, Oman (all ports apart from Salalah), Iraq, Kuwait, Qatar, Bahrain, Saudi Arabia (Dammam and Jubail only) until further notice. This is with immediate notice. Exceptions will be made for critical foodstuff, medicine and other essential goods.
This above suspension applies to cargo originating from, destined for, or transshipping through these countries.
Shipments that contains critical foodstuff, medicine and perishable goods, we will do our utmost to ensure special attention is given.
Jeddah and King Abdullah in Saudi Arabia and Salalah, Oman remain operational and are not affected by this measure at this stage.
We have suspended reefer, dangerous / special cargo acceptance in and out of UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice.
We are currently not accepting dangerous cargo to and from Israel until further notice. All other acceptance to/from Israel remains open.
We are still accepting cargo to and from Jordan and Lebanon.
Yesterday was the turning point (attrition) for the low cost drone & missile war versus high cost defense systems (lack of supply to demand). Things are going to get worse for USA war machine in the middle east, Israel & the Strait of Hormuz will basically be closed as Iran continues to take out the odd tanker. I’ll be surprised if the five Israel desalinization plants are still working in two weeks.
Israel dun goofed
Perhaps, but perhaps not. I don’t see much likelihood of continued damage in Israel. They have a great deal of practice at eliminating their enemies. Pete Hegseth and Fox News says everything’s going according to plan!
They will get thirsty without those desalinization plants, and I think Iran will hit those before it gives in.
I’ll have to check into the damage being done to water and other infrastructure.
Spot on.
ZH:Wall Street Desperately Seeks Details On Trump’s Plan To Unclog Hormuz Chokepoint
=======
see my post below!
IT WAS BU11LLSH11IT STORY BY TRUMP/BESSENT
there was NOT any planning, there was not any details
just hot air !
The “plan” was an assumption that Iran would take a beating and not get back up again nor fight back. Once that proved wrong, it’s now total chaos.
The irony is this might embolden Venezuela to fight back too.
Fighting wars on many fronts is what undoes most dictators.
No need for Venezuelans to fight back. They just made the Vice-President become President, and moved on with their daily lives.
Some economics: Oil companies are performing exceptionally well as margins have risen nicely for retailers, wholesalers and producers! My local gas is up 55 cents and it all comes from Canada with no actual production cost increase
The gold and silver miners and the underlying metals have cooled off nicely during this time of chaos for US buyers. Granted they are not cheap by any means but that parabolic move has been tamped down pretty well. (I have a bunch of covered calls expiring again tomorrow on AEM so that’s fun). The dollar has really captured a bid so that makes it clear that the world is not rejecting our currency in spite of all the rhetoric.
With the supply glut in the global oil picture it should be interesting to see how fast all of those Floating Production, Storage, Offshore boats (FPSO’s) operating all over the world now can react. They should be ramping up production and deliveries. Global production is really diverse now and the world is well supplied with only a few potential disruptions projected in the short term.
If this Hormuz closure continues for long, I think it will provide support for building more nuclear and solar facilities in countries that are squeezed by this oil supply shock. Likely builders of solar are: South Korea, India, China, Brazil, Argentina, Australia and much of Africa.
I sure would not want to be in Iran right now as the US military is simply amazing in its capacity to dominate the battlefield on a massive scope. This plan has obviously been in the works for a few years.
It turns out that “Top Gun” was only a prelude for todays reality.
Can you see out of those rosy glasses?
It’s not easy to see out, but I’m living in a rural part of the US that is not threatened by any of this. My crops and gardens are getting planted, employees are happy and I’m basically “Eating Popcorn” like most Americans while watching the chaos on TV. I bought extra fuel for my machinery, seeds, fertilizers etc. so I can contribute if things are stressed in my local communities.
Hate-n it for the millions of Trump n BiBi’s war victims as my previous missives have been clear about…
Lot’s of small contributions add up locally. I can not change what I can’t change. I can grow food.
The straight is also clogging the shipments of ammonia, essential for fertilizers, very common in rural areas, numbskull.
I’m sure yields will hold up just fine without all those nasty chemical fertilizers.
Honestly who needs cars either. We can all MAKE AMERICA HEALTHY AGAIN by living more like our ancestors! We should thank PRESIDENT Donald J Trump for helping us “realign” BIGLY!
Those nasty corn and soybean crops that are grown on sterilized ground are in trouble without fertilizers. I have used tons of organics to build my soils. All farmers are not created equal. My crops have far better nutrition, less or no pesticides and zero chemical weed control.
My margins are far higher and pollinator products are high margin as well.
Work smarter and harder for financial success…
The veggies in the Central Valley and Mexico all come from that sweet, sweet NH3.
Don’t confuse me with someone that is endorsing the war. I’m not but the damage they do is devastating.
US fertilizers come largely from Canada and our own domestic natural gas.
The rest of the world is kinda screwed. All we can do at this point is hope it is over quickly.
The nut jobs running this fiasco don’t care. They think armageddon is upon us and Jesus is coming back soon. They’re going to be disappointed.
Here’s a hypothetical mental exercise and a what if?
What if a nation-state launches a nuke and hits Israel right at the heart of Jerusalem?
Most religious nuts believe that won’t ever happen but what if it does?
Does that bring an end to all the Christian hopes for the return of a Messiah?
Would that embolden and confirm Islam as the “right” religion?
What if Israel managed to launch a few nukes of their own and hit Mecca?
Does that mean Christianity, Islam and Judaism were all the wrong religions and God is starting with a new slate?
And most important question of all, how do I get off this religious merry-go-round and exit safely?
You may want to emigrate to the moon.
It would be quite radioactive here (everywhere).
What would happen if all people actually thought about the reality of their religion and realized it was nothing more than a way for the elites to control the masses. That a singular or multiples of God(s) of any kind doesn’t exist never has and never will. Ever notice that everyone is an atheist when it comes to the other persons God?
Obviously the only ones that have it right are Scientologists.
They had better hope he doesn’t, because based on their actions, they’re at the top of his smitin’ list.
Are we sure that the straight of Hormuz will not be re-named the:
Straight of Epstein?
Trump?
You’re still talking about Iran? Pffft. Turkey is the new target now. No amount of YOUR money, blood, time and energy is enough for Israel.
https://www.youtube.com/watch?v=nFL-8qkDG_A
Try to keep up.
Trump is available for Israel’s use, for 2+ more yrs.
Not.
Epstein/trump dark hole
Paint it pink and those ships will slip right through!
Asian economies will collapse in 8 months if the Straits stay closed or hostile. Don’t think the US economy won’t be impacted if that happens.
https://www.youtube.com/watch?v=LCO98felMvQ
I warned many times that this clown would crash the stock market, it’s only a matter of time.
Got Puts?
well it depends
japan and s korea first
Already happening.
https://finance.yahoo.com/quote/EWY/
Iran To Allow Only Chinese Vessels Through Strait Of Hormuz
https://www.ndtv.com/world-news/iran-to-allow-only-chinese-vessels-through-strait-of-hormuz-sources-11167611
Iran certainly not going to run out of drones or missiles locking in an alternate supplier.
Think Petey Pushup will hit a Chinese cargo ship delivering them?
Peak global composite equity valuation, represented by ACWI, occurred on 25 February 2026 and is following a 4-phase 25 February 5/13/12-13/7-8 day :: x/2.5x/2-2.5x/1.5-1.6x initial crash Lammert fractal decay series from that peak valuation. Without Epic Blunder, oil prices would have fallen sharply during this 34-36 trading day initial crash period at the terminal portion of a 1982 to 2026 13/33 year 1st and 2nd fractal series. The coincidental timing of the international lawless murder of the Islamic Pope by the Israelis and King Donald and the subsequent global energy shock at the Hormuz choke point, could not have been worse politically for the GOP, considering the post hoc ergo propter hoc reasoning used by most American and world citizens. The sudden breakage of overvalued and overstacked teacups and dishes caused by 17 years of average annual US 6% GDP-deficit spending, by 10-15 trillion dollars of corporate buybacks, and by recent blow-off AI and tech 500 billion dollar private debt expansion … will not be ascribed to the macro-economy’s natural cyclical reordering earthquakes – but to the obvious grunting, huffing, and bellowing bull(s) in the china shop.
Why a US Ground Invasion Looks Increasingly Likely
https://www.youtube.com/watch?v=RVTNi83ZIvg
There is obviously the fog of war, and one can’t possibly think through and plan for every contingency ahead of a war. But it’s probably fair to say that never has an American administration gone to war with as much muddled thinking as the Trump administration. It simply seems to have no clue why it has signed up for this war.
To distract from the Epstein files, at home, and in Israel.
Full stop.
Our soldiers and a bunch of innocent people are being slaughtered to protect t a pedophile.
Netanyahu is the worst US president ever.
Only guy that get unanimous applause from both side of the House…kinda weird
No “please clap” for Benji, it’s “Clap or they find out what you did”
bush jr is still worst
he was plain idi1ot
W might be stupid but he’s not mentally ill like trump.
He wasn’t AS dumb and he didn’t rape kids. I’d swap him in without hesitation.
“the fog of war” is usually something that start to settle in after years….not day 6, LOLz
There’s the fog of war, and there’s the bullshit of war – like the story that those three F-15E’s were accidentally shot down by Kuwait. Bullshit. Iran shot them down. Notice that none of the statements from Kuwait say they did it. They merely “acknowledge the incident”. They won’t outright lie for the U.S. They’ll only issue oblique statements that allow the US to lie about it.
I didn’t believe that either.
One maybe, but three? Lol.
Meanwhile they’re getting the crap bombed out of them because of shit we started.
==one can’t possibly think through and plan for every contingency ahead of a war.
closing Hormuz was always a threat.
or it was obv . for anyone who opened geo. map of middle east
apparently USA generals did not
I’m sure they did. They were ignored.
Looks like it won’t be a problem for China:
https://www.ndtv.com/world-news/iran-to-allow-only-chinese-vessels-through-strait-of-hormuz-sources-11167611
… at least until Trumpstien orders false flag attacks.
How on earth would Iran have much of anything left along the Straights of Epstein to sink a tanker with? Furthermore, their entire communications network is offline, phones do not work, the internet is 98% dark. Giving permission to a sanctioned tanker to head to China would be quite the logistical conundrum IMO.
Central Command is toast, Iran is relegated to relatively independent militias,
Of course there is that possibility of a container full of drones sitting there to swarm out and raise a few blisters.
They don’t need anything along the straits. They can launch from their own back yard.
How did the Houthis continue to have missiles to fire after Trump bombed the crap out of Yemen for six weeks? Iran has been preparing for this for 20+ years, since we invaded Iraq and McCain was singing “bomb bomb Iran”. Iran has planned for a mosaic of independent commanders. Their store of missiles will outlast US bombing. In Vietnam we won every battle and lost the war.
NO1 at Gold and Geopolitics (Underground cities):
But the interesting bit is what happened at midday. Hezbollah launched rockets toward central Israel at the exact moment Iranian ballistic missiles were inbound. Same time. Two axes. The rockets from Lebanon cover for infiltrating recon drones while the Iranian missiles force every air defence battery to light up and reveal its position. Within hours the pattern was confirmed.
Today, they weren’t trying to overwhelm the defences. They’re just taking notes.
Energy is the lifeblood of the global economy and human survivability. Fossil fuels are still 80% of that energy; in spite of the increase in renewables over the last decade, which have only reduced FF use as a percentage by 2%. It will take a century to significantly “transition” away from fossil fuels. As such, the world cannot stand a lengthy interruption of up to 20% oil and gas flows.
I am not expecting the strait Hormuz to stay closed for more than 2 weeks because of the impact that closing would have on the world economy. There is enough oil and LNG currently in transit on the oceans, and in storage around the world to manage a two week interruption. After that, the impacts will become severe.
India, home to 1.4 billion people will be hit hard, and quickly. While they use a lot of coal, almost 30% of their energy use is oil and gas, and 95% of that is imported, half of which is now stopped. It only takes 4-6 days for oil from the Persian Gulf to reach India. Which means that they are no longer receiving any oil from the Gulf. They have strategic reserves of almost 100 mb, but those will dwindle to nothing within a month.
After India, this scenario will be repeated in China, Korea, Japan and other Asian users of Persian Gulf oil and LNG.
In North America we will be hurt least, and last, because we don’t rely on oil and gas from the Persian Gulf. But it’s a global market and we are not immune to the huge price increases that will result, and the global economic collapse that could occur.
As such, there will be a global push to get that oil and LNG flowing again; even if the conflict itself does not completely end. The rest of the world has no choice but to get involved. Because every day that the strait is closed, the world’s buffers are melting away.
I could be wrong. If I am, then the world economy is going to be hit very hard.
I don’t see how the U.S. can keep the straight open. The navy already kiboshed Trump’s lame brain idea for “escorts”. Unless you think Iran will soon be thoroughly defeated (I don’t), Iran will be able to continue taking potshots at ships. They also have mini subs that can deposit mines.
Everyone can pay fees to China to get their ships through. Lol.
Oddly, the insurance cos. may regard that as a reduction of risk.
I agree. The US cannot provide the guarantees that will incentivize the ships to transit the strait.
Which is why the rest of the world will pressure Iran to allow ships to move again. And to stop damaging energy infrastructure throughout the area.
How the world will manage this, I do not know. But the world has no choice. They cannot allow the strait to be blocked for very long. China, India, Japan, Korea and others will do something. Or their economies will be severely damaged by the end of March.
China already has.
Good points, many nations have a strong interest in ending the chaos. This speaks volumes for other nations stepping up behind the obliteration of Iran and taking out its military hardware.
Ya don’t tug on Superman’s cape, ya don’t piss in the wind and you don’t stand up to a bully with guns unless you have friends. Iran does not have many effective friends. See Gaza… No one stepped up to save the Palestinians…
China is just sitting back watching the US spend, Spend, SPEND! deplete, Deplete DEPLETE!
They have been using the low global oil prices to fill their strategic reserves and continue to take deliveries from elsewhere. Those Russian pipelines were great investments.
The US remains aggressive, Trump feels omnipotent and Congress and the military and industrial and network news are all marching in the same direction.
It will work ~ Until it doesn’t…
The rest of the world will rather pressure the Epstein Coalition to stop this madness. If that doesn’t work, they’ll fully support Iran and it’ll let their shipments through. The non pedophile world will make do.
They could all agree to turn their backs on the stain on humanity the USA has become. Just cut trade and move on.
That’s the only real solution to this problem for them. Trumpstien can tantrum and tariff all he wants, and they can just watch with amusement.
China is an ally of Iran. Those other countries aren’t.
If they want oil bad enough, they could get friendly.
Trump will “allow” India to buy sanctioned Russian oil that is currently floating in tankers all over the world.
Modi must have called Trump and told him he had no choice but to start buying Russian oil.
There’s around 48 mb of sanctioned Russian oil in tankers all over the world. Which is equivalent to around 3 days of Persian Gulf shipments.
From your WSJ quote-
“As of Wednesday, day five of the war on Iran…”
Since when was Congress involved? One would think that whatever staff is left at the WSJ would know that ‘war’ has not been declared, this is just a conflict or military action. No need for the media to gin up hysteria like that!
(yes, you have detected a note of sarcasm in this comment)
unbelievably Senator Mullin (Okla) said what you said but wasn’t being sarcastic:
“This isn’t a war. We haven’t declared war,” Sen. Markwayne Mullin (R-Okla.) said on CNN on Monday, later adding that Iranian Supreme Leader Ayatollah Ali Khamenei “declared war on us. We are not at war with the Iranian people.”
The Naked Capitalism blog has a nice write up on the economic ramifications. The below is excerpted from Craig Tindale, from the ongoing coverage of the war.
“From this follows a chain whose logic is cumulative: fuel inflation becomes fertilizer inflation; fertilizer inflation becomes food inflation; food inflation becomes urban instability, sovereign subsidy exhaustion, and ultimately hunger. In this sequence, food shortages are not a secondary humanitarian issue. They are one of the central political outcomes of the crisis, because modern populations do not experience systemic breakdown first through grand strategy, but through unaffordable bread, intermittent power, empty pharmacies, and possibly the collapse of public order. A globalised Arab Spring.
In this framework, hyperinflation emerges as the social expression of real physical bottlenecks. When energy-importing states are forced to acquire dollarized fuel at any price, when currencies weaken, when fertilizer and transport costs reprice an entire harvest cycle, inflation ceases to be cyclical and becomes coercive.
It enters every household budget and every state ledger at once. The result is the destruction of planning itself: firms cannot quote, governments cannot subsidize, and populations can no longer calculate the future. Under such conditions, credit markets seize up, foreign-exchange reserves drain, sovereign spreads widen, and the boundary between economic crisis and political crisis disappears.”
U.S. equity futures jumped around 4:00 a.m. ET after Bloomberg News reported that Iran had previously signaled a willingness to surrender its highly enriched uranium stockpiles in high-stakes negotiations, just before the U.S. launched Operation Epic Fury.
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another feel good story from ZH
problem IS IT WAS ALREADY REPORTED BEFORE WAR!!
I guess trump/cia/dod are out of good stories on the ground!
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to remind you during WW2 USA-Britain started bombing Germany in 1940..
in 1944 -45 they bombed away whole cities!
but it was Russians who killed most German troops in east front!
i guess EITHER USA PUTS BOOTS on ground ,or it is time to surrender for Donny!
How? Took 6 months for the Iraq war, not including planning leads.
What troops, how to ship stuff, how to land, where ?
TACO Thursday?
15% tariffs to go into effect today.
World is not happy about war and its externalities while getting new tariffs
Tariffs that will be declared illegal just as the last ones were. Trump is not well…
Agricultural fertilizer (urea) market upended by Homuz closure
https://adamtooze.substack.com/p/chartbook-436-unseasonal-war-how
I believe that affects diesel trucking as well.
=some off topic oil and china
on ZH post by post how bad USA=Iran war FOR CHINA!!
basically main motive China imports lots of oil from middle east / Iran, so no oil , so
china is fuck11ed!!
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you would think in 21th century someone would make pixs of dozens of gas stations in china across country, and compared prices to month, 3 months ago to find out IS THERE LACK OF OIL IN CHINA??
Not just China, Japan and India also.
A detailed exam of 12 different economic areas that can be affected by the Hormuz closure–not just oil/LNG
https://ctindale.substack.com/p/systemic-risk-a-12-order-cascading
Well I guess it turned out to be a good thing, and by that I mean, we saw exactly what we needed to see. We can now much better prepare for these types of issues, by having a plan (storage etc.) that keeps un from being shut down. If we are, then we should have a backup plan in place moving forward as well. War is ugly, but extremely ugly with no resources to fill your needs. That’s clearly seen right now.
We now know that the world’s fifth-biggest producer, will shut things down, or can be forced to by just about any Country with resources to do so, and at any time. This was good to see play out. A big example is “Iranian attacks on regional energy infrastructure, which prompted Qatar’s national producer to stop making liquefied natural gas.” Again, we now know what we need to do, so we are not floundering around, after a strike to an exposed stock pile.
Traders questioned whether the U.S. would be willing to put expensive naval ships in harm’s way, and that’s a great question. Some could say it’s our doing, so we should clean up the mess we created. Some could say, why did you leave yourself so vulnerable. Some could say, it’s not our responsibility to be the Worlds Policeman. Not sure we’re I stand, as it’s very convoluted…
By Tuesday, Iraq had enough space to store the volume of oil it typically exports through the Strait every three days, according to JPMorgan Chase analyst Natasha Kaneva. Unless the Strait opens, 3.3 million barrels of daily production in the region could be lost by early next week, she calculates—roughly enough to supply Japan.
Hormuz will not remain closed, and I think that’s been settled already. It’s just the avenue in which to take, and how much more time they will need to do so.
“Trust the plan.”
All this to continue the Epstein coverup.
Just a question. It seems to me that the 1973 first oil chock blocade concerned a lower share of oil production at the time. So if the Ormuz blockade continues to last can we expect the oil price to increase ×4 in 6 months as it did in 1974?
in 1970xx USA oil production barely existed!
and USSR oil was local, by oil pipes into western Europe only!
now USA is biggest consumer/producer in world
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so! no! oil wont be up 4xx
but it does not matter. most people in developed world are broken and in debt!
so 50% will be enough!!
Yes and in that time countries like China were underdevelopped with few cars and living in the dark during the night.
What matters are effective shares. It seems to me the share of blockaded oil corresponded to something like 10/13% of world production at the time compared to 20% today.
=China were underdevelopped with few cars and living in the dark during the night.
and yet now , china produced locally about 5 mil barrels per day, and it is top 5 in the world!
Ok got the numbers. The world crude production back then was at 56 Millions barrels per days.
The blockade from the participating arab countries withdrew 5 Millions barrels per day.
So the cut at the time was 9%. But with those 9% oil prices increased by ×4 in a little over 6 months. Compared to 20% today.
you cant compare 70xx and now
back then people were basically plain morons!
Shhh….”Trust the plan.”
So ~ which is it?
Hegseth states we control all the airspace.. In his words, we have established “Total Domination of Iran”.
The shipping industry says Hormuz is unsafe.
As an aside. Those ships clustered only a few miles on both sides of Hormuz look like sitting ducks if Iran had any capacity to hit anything. Clearly, they don’t have anything to fight with IMO!
Just start shipping again! Iran is toast!
Obviously we should believe the one with the pretty hair and the tattoos. All the 304 soccer moms do. 😍😍😍😍
Hegseth is an evangelical Christian who believes Israel needs to start construction of the 3rd temple on The Temple Mount so that the rapture can happen…so there’s that.
Think of the photo opportunities!
Does Hegseth have a side gig at Fox News?
Looks like their makeup department has done his makeover… An that reminds me. Do those soccer moms trade their sweaty little stepdaughters to Trump and Hegseth for “Special Favors”? Like tickets to the Republican Redemption Ball?
Stepdaughters are like cash currency in Utah.
Breed em Young set the standard for marriage at 12!
Trump? He has no age limit…
=Hegseth
my first rule NEVER EVER BELIEVE ANYTHING WHAT GOV TELLS ME
(c) George Carlin
ps
he was smart man!!
Regular gas is up 55 cents per gallon in my midwestern market (@16%).
Physical cost of the daily military expenditure is estimated to be between $750 million and $1 billion per day. Add that to the economic disruption of $200 billion lost for the US alone and you are talking real numbers.
All to satisfy BiBi and get him to keep the Epstein files closed and hidden?
Hey man, no worries, Kevin Warsh incoming @ the Fed…he’s got this.
Who is Kevin Warsh? Well he’s the son-in-law of Ronald Lauder (of the Estes Lauder fame).
So what?, you may say.
Well, Ronald Lauder is the president of the World Jewish Congress and good friend of Bibi. Lauder was also a classmate of Trump back in the 1960’s.
See how it all fits together?
Epstein connected
“It’s a Big Club and you ain’t in it. You and I are not in the Big Club.”
So I guess the $20B loan to the World Bank, that’s due, won’t make that much of a difference. Bummer…
Gasbuddy.com retail price chart….oooofffffaaaa
https://www.gasbuddy.com/charts
Ameriburger’s going to be sad face at next fill-up
insurance means jack!!!
you lose ship, get a money possibly in 2*6 months and it will take another year to build one..
SEE PROBLEM?
and guess who builds most tonnage in world by far.
hint: starts w/ CH , ends w/ NA!
While it helps with the ABILITY to navigate the Strait, there remains the question of ship owners’/operators’ WILLINGNESS to do so.
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wow!! this guy is as smart as me. only I posted that 2 days ago!
and IT WON’T HELP. AS W/ EVERYTHING FOR DONNY ADMIN. it is a lie.
he is bullshitter- in-chief! bigly!!!
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insurance means jack!!!
YOU LOSE SHIP, GET A MONEY POSSIBLE IN 2*6 MONTHS AND IT WILL TAKE ANOTHER YEAR TO BUILD ONE..
SEE PROBLEM? and guess who builds most tonnage in world by far.
hint: starts w/ CH , ends w/ NA!
alx
brent oil $chart WOULD BE MORE INFORMATIVE.
world outside USA lives on Brent price.
210 billion sounds a lot. But it’s about 2 months interest expense of the federal, state and local governments.
Let’s hope it pays off with the mullahs neutered.
it’s about 2 months interest expense of the federal
not sure about interest.!
but USA fed gov spends $200+- bil per each month. each month
“Mullahs” is an indicator of retardation.
It will be paid off by tariff money so technically the war will be paid for by the rest of the world 🙂
The U.S. is largely insulated from oil and natural gas price increases. They’ll go up, but Europe and Asia are suffering the most.
The financial markets are defying gravity, but they’ll catch up to reality soon.
If I may make a prediction: Iran will be nuked before this is all over.
yeah. obv you were on Mars last 5 years!!
if middle east / russia are out of world markers, obv additional source is USA only
so oil-gas global company can ship into europe/asia for higher price, or do NOT SHIP AND JACK UP PRICE here.
see problem?
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in lame terms , if all mcdonals in city are closed and yours is open., would you up the price ?
alx
Oil and gas are priced globally, so there is no insulation. As prices go up, oil producers in the US will have incentives to export that oil unless local prices match foreign demand.
Yep. Arbitrage will quickly dwindle that insulation down to nothing.
It will only go so far. You still have to come to America to get that oil you bought there vs Middle East (Amazon ain’t delivering it). That means re-arranging transport on a global scale (would there be enough port space available).
Then there’s the whole idea of whether or not Trump would ALLOW that oil to be exported. He can easily stop it during a war under the guise of national security. By the time the courts ruled (months) the war will be over.
To stop the use of a nuclear weapon they will use a nuclear weapon.
The hypocrisy is unreal.
The US may be also, as the world becomes more angry at us.