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Significance of Strait of Hormuz : It is a small area of just 33 kilometres located between Iran, Oman and the UAE.
It is a narrow sea passage through which almost 20% of the world's oil supply flows, nearly 17 million barrels every day.
USA today:
7 million Americans in the streets today protesting for freedom.
3,000 cities and towns. Every single state. โNo Kingsโ protests against the authoritarianism of the Trump. This is one of the largest demonstrations in American history.
JUST IN:
๐บ๐ธ๐ฎ๐ท Trump says the US is leaving the war:
โWeโll be leaving very soonโฆ what happens in [Hormuz] weโll have nothing to do withโ
Other countries can fend for themselves if they want gas or oil from the Persian Gulf.โ
But the situation on the ground shows that is now true and he again is trying to manipulate markets
โ ๏ธ๐จ THIS IS NOT A DRILL ๐จโ ๏ธ
The global oil supply just broke in TWO places at the same time. Here's the chain reaction that's about to hit your wallet:
Step 1: The Iran war puts the Strait of Hormuz โ 20% of the world's oil โ into an active combat zone. Houthis just joined the fight. Red Sea shipping is threatened.
Step 2: Ukraine destroys 40% of Russia's oil export capacity in ONE WEEK. 2,000,000 barrels per day OFFLINE. Repair timeline: 18 to 24 MONTHS.
Step 3: Two of the world's biggest supply routes compromised simultaneously โ oil prices SURGE.
Step 4: When oil goes up, EVERYTHING goes up. Gas. Food. Shipping. Heating. Plastics. Fertilizer. EVERYTHING.
Step 5: Goldman Sachs issues emergency oil shock analysis. CNBC calls it "a new oil shock building." MarketWatch says investors have "nowhere to hide."
Step 6: India โ 1,400,000,000 people โ gets 80% of its Russian crude from the ports Ukraine just destroyed. They're SCRAMBLING for alternatives at higher prices.
Step 7: Higher energy costs push inflation back up globally. Central banks CAN'T cut rates. They might RAISE them.
Step 8: Higher rates = higher mortgages, higher car loans, higher credit card payments. Consumer spending COLLAPSES.
Step 9: Companies facing higher input costs + falling consumer spending = LAYOFFS. Tech. Manufacturing. Retail. ALL of them.
An energy analyst I know told me yesterday: "This is the first time since 1973 that two major oil supply routes have been disrupted at the same time. People are pricing in a spike. They should be pricing in a restructuring."
This is EXACTLY what happened before every major economic downturn. Supply shock โ inflation โ rate hikes โ recession.
THE SAME SEQUENCE IS PLAYING OUT RIGHT NOW.
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