Kate Mackenzie and Tim Sahay in The Polycrisis:
The illegal war launched by the United States and Israel against Iran has triggered the mother of all commodity-supply shocks. In response to the unprovoked onslaught, Iran’s closure of the Strait of Hormuz, the narrow waterway between Iran and Oman’s Musandam peninsula, has brought to a standstill the delivery of huge amounts of the world economy’s critical inputs.
Iran is the seventh country to undergo US military intervention in the first fifteen months of Trump’s presidency; five of these seven are rich in oil. Oil wars might make sense if American companies actually wanted to drill more. But they are hesitant to do so when oil is oversupplied and under-demanded. The raid on Caracas in January earned little interest among international oil majors, who were unenthused about the prospect of resuscitating Venezuela’s decrepit infrastructure and bitumen-like oil reserves, despite White House exhortations.
The world has never seen an interruption on this scale to the supply of stuff. It easily surpasses the 1979 oil crisis, sparked by the Iranian revolution, in which crude oil production declined by 4 percent. Forty-seven years later, Hormuz is the passageway for one fifth of the world’s crude oil and one fifth of its liquefied natural gas. It’s also the transit point for a third of exported urea—a feedstock used for making fertilizer which grows the food for an estimated half of the world’s population.
More here.
Enjoying the content on 3QD? Help keep us going by donating now.