Mona Ali in Equator:
The closure of a strategic waterway by a besieged nation ranks among the rarest and most consequential events in the history of the global economy. It has happened only twice in the postwar era. In 1956, Egypt closed the Suez Canal for five months – an act that broke Britain’s imperial currency and inaugurated the petrodollar age. It demonstrated for the first time that a small country could inflict serious damage on the economic order that had subjugated it. Now Iran has effectively blockaded the Strait of Hormuz, through which a quarter of the world’s seaborne oil passes. The question is whether this crisis heralds the end of American hegemony – and marks the beginning of the struggle over who or what will replace it.
The US-Israeli war on Iran has stranded more than 3000 vessels in the Persian Gulf and left the world short of over eleven million barrels of oil a day. Entire hydrocarbon-based supply chains have been disrupted: not just oil and gas exports but also supplies of urea used in fertiliser, helium for semiconductors and sulphur for defence equipment. Having long suffered under Western sanctions, Iran is now deploying the economic weapon itself.
The effects are ruinous and cascading.
More here.
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