{"id":1483552,"date":"2024-08-14T13:45:00","date_gmt":"2024-08-14T17:45:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1483552"},"modified":"2024-08-14T13:45:00","modified_gmt":"2024-08-14T17:45:00","slug":"one-step-away-from-the-biggest-oil-shock-in-history","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/one-step-away-from-the-biggest-oil-shock-in-history\/1483552\/","title":{"rendered":"One Step Away From The Biggest Oil Shock In History"},"content":{"rendered":"

One Step Away From The Biggest Oil Shock In History<\/span><\/p>\n

\n

Authored by Nick Giambruno via InternationalMan.com,<\/em><\/a><\/p>\n

The Strait of Hormuz is a narrow strip of water that links the Persian Gulf to the rest of the world.<\/strong><\/p>\n

It\u2019s the world\u2019s single-most important energy corridor, and there\u2019s no alternative route.<\/p>\n

Five of the world\u2019s top 10 oil-producing countries\u2014Saudi Arabia, Iran, Iraq, United Arab Emirates, and Kuwait\u2014border the Persian Gulf, as does Qatar, the world\u2019s largest liquefied natural gas (LNG) exporter. The Strait of Hormuz is their only sea route to the open ocean\u2026 and world markets.<\/p>\n

At its narrowest point, the space available for shipping lanes is just 3.2 kilometers wide.<\/strong><\/p>\n

<\/a><\/p>\n

According to the US Energy Information Administration, more than 40% of global oil exports (around 21 million barrels) transit the Strait daily.<\/p>\n

That\u2019s more than $1.5 billion worth of oil every day.<\/p>\n

And that\u2019s not considering the immense amount of LNG\u2014 about 33% of the world\u2019s daily LNG exports\u2014and other goods transiting the Strait.<\/p>\n

It\u2019s hard to overstate the importance of the Strait of Hormuz to the global economy.<\/p>\n

If someone were to disrupt the Strait, it would cause immediate global economic chaos as energy prices skyrocket.<\/strong><\/p>\n

Thanks to its commanding geography and expertise in unconventional and asymmetric warfare, Iran can shut down the Strait, and there\u2019s not much anyone can do about it.<\/p>\n

It\u2019s Iran\u2019s geopolitical trump card.<\/p>\n

Analysts believe it would take weeks for the US military to reopen it, but nobody really knows if it would ultimately be successful. The Millennium Challenge 2002 war game suggests it wouldn\u2019t be.<\/p>\n

Military strategists have known about this situation for decades. But no one has found a realistic way to neutralize Iran\u2019s power over the Strait.<\/p>\n

Iran has been crystal clear that it will close the Strait in the case Israel or the US attacks it.<\/p>\n

In other words, Iran holds a knife to the throat of the global economy.<\/p>\n

The US has sought to overthrow the Iranian government since the 1979 Revolution\u2014for over 40 years. Iran\u2019s control over the Strait of Hormuz has always served as a big deterrent to US regime change ambitions and invasion plans.<\/p>\n

Now, Iran and the US are headed toward a confrontation that will almost certainly disrupt the Strait.<\/p>\n

The potential outbreak of an enormous regional war in the Middle East could force the US to act against Iran this time.<\/p>\n

If war breaks out between the US and Iran\u2014an increasingly likely outcome\u2014I have no doubt that Iran will close the Strait of Hormuz.<\/p>\n

To call that a severe oil supply disruption would be a major understatement.<\/p>\n

Consider this\u2026<\/p>\n

During the first oil shock in 1973, about 5 million barrels were removed from the global oil market. Daily global oil production was approximately 56 million barrels per day at the time, which means about 9% of the supply vanished.<\/p>\n

Oil prices roughly quadrupled<\/strong>.<\/p>\n

During the second oil shock in 1979, about 4 million barrels were removed from the global oil market. Daily global oil production was approximately 67 million barrels per day at the time, which means about 6% of the supply vanished.<\/p>\n

Oil prices nearly tripled<\/strong>.<\/p>\n

During the third oil shock in 1990, about 4.3 million barrels were removed from the global oil market. Daily global oil production was approximately 66 million barrels per day at the time, which means about 7% of the supply vanished.<\/p>\n

Oil prices more than doubled<\/strong>.<\/p>\n

If Iran were to shut down the Strait of Hormuz, it would remove a whopping 21 million barrels of oil from the global market. Today, global oil production is approximately 94 million barrels per day, which means about 22% of the worldwide oil supply could disappear.<\/p>\n

As we can see in the chart below, it would be the largest oil supply shock the world has ever seen\u2026 by far.<\/strong><\/p>\n

<\/a><\/p>\n

If war with Iran proceeds and Tehran closes the Strait of Hormuz, I think the effect on the price of oil will be at least as severe as it was during the 1973 oil shock, which saw oil prices go up 4x.<\/p>\n

A similar move today could see oil prices above $300 a barrel.<\/p>\n

However, I consider that a conservative estimate because closing the Strait of Hormuz would cause a much larger supply shock than the 1973 OPEC oil embargo.<\/p>\n

I think the market doesn\u2019t appreciate how close we are to a war with Iran and the implications of it.<\/p>\n

I\u2019m certainly not cheering for war. I despise war, which is the health of the State.<\/p>\n

Regardless, a big war is highly likely, with significant investment implications that would be foolish to ignore.<\/p>\n

<\/a><\/p>\n

That\u2019s precisely why I just released\u00a0an urgent new report<\/a>\u00a0with all the details, including what you must do to prepare. It\u2019s called\u00a0The Most Dangerous Economic Crisis in 100 Years\u2026 the Top 3 Strategies You Need Right Now. Click here to download the PDF now<\/a>.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 08\/14\/2024 – 09:45<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/energy\/one-step-away-biggest-oil-shock-history<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

One Step Away From The Biggest Oil Shock In History Authored by Nick Giambruno via InternationalMan.com, The Strait of Hormuz is a narrow strip of…<\/p>\n","protected":false},"author":0,"featured_media":1483553,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1483552","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1483552","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1483552"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1483552\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1483553"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1483552"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1483552"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1483552"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}