Energy Prices Surge as Strait Of Hormuz Closes For Business

The Strait of Hormuz is one of the most important chokepoints in the global oil market, and now it’s effectively closed in the wake of Washington’s illegal war against Iran. 

As it turns out, a nation that controls a strategic shipping lane just may close it if you kill their religious leader, their political leaders, and 1,000+ civilians, incuding children.

At least that’s the lesson that Washington and Tel Aviv are learning this week after launching an “unjust and unconstitutional” war against Iran.

In response to the U.S./Israeli attacks, shipping through the Strait of Hormuz has ground to a halt. Roughly a fifth of the world’s oil supply moves through that narrow waterway. So when Iran chooses to close it in an act of self-defense, global energy markets feel it immediately.

I am old enough to remember when Americans were promised no more wars, let alone lower energy prices, by this current administration.

Instead, Americans are now faced with a new war of aggression in the Middle East that appears to be spiraling out of control along with rising energy costs to boot.

Markets are already responding. U.S. crude has climbed above $81 per barrel while Brent approaches $86.

War threatens supply. Prices rise.

And you can already see the effect at the gas pump. The national average price for regular gasoline now sits around $3.25 per gallon, higher than this same time last year.

Diesel prices have jumped even more.

Meanwhile, the cost of chartering a very large crude carrier from the Gulf Coast to Asia has exploded higher as shipping risk surges.

War is never cheap.

But that never seems to be a problem for Americans, for which U.S. defense contractors are undoubtedly thankful.

Have you noticed that despite the incessant bluster to the contrary, neither political party cares about Washington’s out-of-control spending levels, let alone its unprecedented debt levels?

But I digress…

The latest estimates suggest that Washington’s new illegal military adventure is costing U.S. taxpayers roughly $11,500 per second.

That’s around $41 million per hour or $1 billion per day.

But those are just the financial costs, which apparently don’t matter to Americans. Otherwise, they would band together and try to do something about it.

That’s what the American Revolution was about. And it was fought over far fewer grievances than modern Americans are facing today with the rise of mass surveilance, warrantless data collection, militarized police forces, endless foreign wars, civil asset forfeiture, indefinite detention powers, currency debasement, and a tax code so complex that citizens cannot realistically understand it.

Yet, the greatest costs will be the lost lives and the suffering of the widows, orphans and displaced peoples left behind in the carnage. Those costs are incalculable.

And all of these costs rise each day this war continues.

And how long will this new war with Iran last?

Great question.

Back in 2003 as U.S. Defense Sec Donald Rumsfeld was trying to justify why America had to bomb a country that had not attacked us, a reporter asked how long the military operations in Iraq would take.

Rumsfeld replied: “It could last six days, six weeks. I doubt six months.”

That war lasted around eight years.

So it’s probably no comfort to hear Trump’s recent claim that the current Iran war will be over in “four to five weeks.”

Americans have heard this story before.

And yet here we are again.

Bottom Line: War is a racket, but it is the lifeblood of Washington. Politicians promise peace while lighting new fires of homicidal violence across the globe. War spreads suffering, drains economies, and enriches the few who profit from it. Every bomb dropped eventually echoes through the global economy. War is the fastest way to destroy human flourishing and prosperity. Peace is not weakness. Instead, it is the only path that can lead to true prosperity. History keeps teaching the same lesson. We will learn it… or suffer for ignoring it.

Blessings,

Jerry Robinson

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