Donnie Stagflation
By 
The war on Iran is bad because it’s bad; no secondary bad impact is necessary for it to be a terrible idea. But if the blockade of the Strait of Hormuz continues for any length of time, the economic effects are going to be disastrous:
The war will yield higher oil prices. The only question is about the size and duration of the spike.
The danger here isn’t merely a collapse in Iranian oil exports, although that will have some effect. Iran is the world’s fifth-largest oil producer, supplying 5 million of the 107 million barrels that the world pumps daily. Although this oil is heavily sanctioned — and thus barred from the US market — it helps to satisfy China’s energy demand. And every barrel that China purchases from Iran is one that it need not buy from the global market. In this way, Iranian production dampens global oil prices.
Nevertheless, the world could easily adjust to a loss of 5 million daily barrels. The United States and the Gulf countries have plenty of spare fossil fuel capacity. The real hazard is that Iran could close the Strait of Hormuz — a narrow waterway between Iran and Oman, which is one of the global energy trade’s most important chokepoints.
About one-third of the world’s seaborne oil exports and a fifth of global natural gas shipments flow through the strait each day. Were Iranian forces to blockade it — or the war itself to render the strait unsafe for commercial vessels — global energy supplies would abruptly fall. Although Saudi Arabia and the United Arab Emirates can export some of their oil through alternative pipelines, most of the crude can only be routed through the Strait.
The Iranian regime has repeatedly threatened to close the strait in past conflicts with the US. But it has never actually done so. And for good reason; Iran itself can scarcely export oil without use of the waterway. And such a blockade would also harm Iran’s chief patron — China — even more than it would burden the West. As of 2024, 84 percent of crude oil shipped through the strait went to Asian markets, while only about 6 percent goes to Europe and the United States.
Then again, Iran has not launched missiles at Dubai hotels and airports during past conflicts with the United States. And of course, they also did not lose their supreme leader in the US-Iran missile exchanges of 2020 and 2025.
On Saturday, Iran’s Revolutionary Guards reportedly told vessels that passage through the strait was no longer allowed. On Sunday, four oil tankers near the Strait were attacked. Commercial traffic through the waterway has ground to a halt.
Then again, Iran has not launched missiles at Dubai hotels and airports during past conflicts with the United States. And of course, they also did not lose their supreme leader in the US-Iran missile exchanges of 2020 and 2025.
On Saturday, Iran’s Revolutionary Guards reportedly told vessels that passage through the strait was no longer allowed. On Sunday, four oil tankers near the Strait were attacked. Commercial traffic through the waterway has ground to a halt.
We don’t know how Iran will react, but all signals is that isn’t ending anytime soon:
President Donald Trump suggested on Monday that war with Iran could last a month or longer.
“It’s OK,” he continued, if even more time is needed to complete the operation, dismissing potential readiness concerns, even as he maintained that plans were ahead of schedule.
Another round of hearty congratulations to the “Peace President will make Burger Less Exponsive” marginal voters in the seven swing states, the common clay of the west, you know…