Is it going to be a GFC style crash where I want my assets in currency denominated investments (e.g. bonds) to buy assets at crazy low values or is it going to be mega-inflation where I want my assets in commodities and stocks?
I am not going to use this strategy but my guess is first the first then the second. Stocks seem to be already on very high levels. Commodities might fare less well as oil is major input. So high prices probably lead to less demand to lower prices or at least combating the cost increases from oil as input.
Not just the price, the physical volumes. China's central bank has been discounting their bonds beyond what the market can support in order to get more free cash to buy up as much metal as possible as soon as possible, to the point that people are making millions this month just in the arbitrage from buying up everything in the London and Chicago exchanges to give to China.
Just keep in mind that we've had three 20% drawdowns in the past five-ish years that have all recovered. Even if we do have a crash, I don't think it'll last long. But, this war has thrown a wrench into things and I don't think AI spending can carry us through this year, so who knows.
"There's likely to be a global recession, driving millions of people to destitution and starvation and thousands to death. How can I profit from this?!!!"
Wait, what?!? Nothing about trying to strategically put yourself in an ideal situation during a recession is going to make anyone else worse off. Much of this isn't zero-sum, and assuming the investments are not rent seeking.
If I were to invest in potatoes because I thought people might need potatoes, then there should be an incentive to make more potatoes, and if people need potatoes, then more potatoes are likely to exist... which helps people get food.
If I instead concern myself with clutching my pearls and tightly as I can, and I don't invest in potatoes, then there is less of an incentive to make more potatoes, fewer people are able to buy the limited supply of potatoes, and everyone is poorer for it.
Many people believe the root cause of the Arab Spring set of insurrections and wars was food inflation. And it's now a lot more expensive then what kicked off the Arab Spring.
Either that, or it will force most countries to electrify their economies, which has made economic + ecological sense for decades.
The oil interests will do everything they can to fight it. (Like buying off Trump, which probably had a lot to do with us starting the Iran war, and is certainly why we're cancelling many affordable energy build outs in the face of widespread shortages.)
Less corrupt economies will pull ahead, and technological progress will bifurcate. The US will probably be on the wrong side of this. China will probably be on the right side.
I doubt people here can give realistic estimates as to how quickly we can ramp up the production of e.g. heat pumps, since a lot depends on how much we're willing to pay for it. There are many areas where we have the technology to electrify, we just don't do it because at current fuel prices pay back times for electrification are too long. There are also simple things like better insulation for buildings that can dramatically reduce fuel demands.
The US produces much more natural gas than it consumes, so changes like this don't really make sense.
Europe started implementing these initiatives a couple of decades ago, it makes sense there as they are a net importer, with residential prices around 3x higher than the US. In my country a newly built house (very low energy demand) is often cheaper to heat with a heat pump than natural gas, especially if combined with solar PV - but that's still more expensive than a home in the US.
The most impactful usages are transportation, as everywhere basically everything is transported by road, and renewable electricity generation, so fossil fuels can be used elsewhere (residential, industrial, etc).
> Like buying off Trump, which probably had a lot to do with us starting the Iran war...
Oil companies have actually not benefited from America's middle-eastern wars. America's regime-change wars have made the region less profitable for US oil companies. Why invest in infrastructure in countries with unstable regimes, or risk of infrastructure becoming a target?
If anything, energy companies would benefit from the sanctions on Iran being lifted, so they could invest in infrastructure there, or buy gas from Iran.
I hope one day this silly 'war for oil' meme will disappear.
That’s a weird thing to say considering that the Iran hostage crisis helped swing an election almost half a century ago. It’s not like nobody thought about going to Iran until someone bribed Trump to do it.
The far more rational theory is that Trump did it to deflect from his failure to combat inflation domestically. They made an entire movie about his. (Wag the Dog.)
This war of choice is going to redefine the US's policy and relationships with Middle East, China, Russia and Europe for the rest of the century. Even if it ends tomorrow. Mainly because the only way it ends tomorrow is if sanctions on Iran are lifted. And they should be lifted anyway so I'd be a fan of that.
China, Iran and Russia look to the the big winners here. Everyone else is a loser, the US the biggest loser of them all. In history books I think this will go down as the biggest geopolitical miscalculation and mistake in US history of anything to date and it's not even close.
The Middle East consists of a bunch of US client states where arms are used to maintain fealty. The US gives arms to a despotic regime who enrich themselves off of their country's natural resources and they use those arms to stay in power.
This last month has shown the US security guarantee to the Gulf to be a paper tiger. This is a seismic potential rift between the US and Israel. This war of choice has undermined relationship with long-term allies (eg in Europe) who were never consulted and never approved of this war and may suffer with significantly higher electricity prices as a result.
This is a Napoleon invading Russia level of blunder.
As weird as this sounds, militarily and strategically, Iraq was a relative "success". I mean not to the thousands or millions harmed or killed by US actions and all the damage done along the way, but Iraq now does a US-friendly regime and it exports oil to the US and a bunch of allies. Should we have done it? No. Was it worth the price? No. But was it a complete failure? Also, no.
Unlike Iraq, there's no way to invade Iran. it's surrounded by mountains on 3 sides and ocean on the third. It's a country is ~93 million people with a regime and a military specifically designed to resist US bombardment and interference. The chokehold it has on the Strait of Hormuz is currently being demonstrated. And there's nothing the US can do about that.
If the leaked terms of the 15 point plan are true (and that's a big IF) and any end to hostilities looks remotely like that, Iran is going to end up in a substantially better position than they had under the JCPOA and sanctions will also likely end. That's now the price of peace.
And in doing that the US has worsened and likely will redefine its relationship to every country from Spain to Japan.
1. Send Marines to seize Kharg island via long range air assault from 2 ARGs + land bases
2. Flood Kharg-adjacent mainland with tactical aviation to eliminate short range artillery and rocket systems
3. Fortify position on Kharg island and declare all oil revenue will be placed in US-controlled holding account, with release to Iran contingent on cooperation (re: Why occupy Kharg? Because then you have actual money in an account as leverage, while calming international oil prices and consumers, not just a blockade, which antagonizes international oil consumers)
4. Declare a buffer demilitarized zone around the Strait of Hormuz
5. Land Marines in buffer zone if necessary to monitor
~50% of the revenue to pay the Iranian military comes from oil exports. Therefore, the Iranian regime doesn't survive without oil export revenue. 90% of Iranian oil is exported through Kharg.
It's an aggressive plan, but it's feasible.
Especially because Iran has no ability to repel an invasion of the island or retake it once it's occupied.
Their only possible reaction would be to bombard troops there, destroying their own export infrastructure in the process.
Which would depend on how close to the mat the current regime wants to take this, as that would also seal their eventual downfall.
I don’t disagree with any of your assessments, but I don’t know if it’s a bigger mistake than Iraq…yet. That war was a 10 year (longer if you bc point ISIS) debacle that cost trillions.
Let’s wait a few years before saying this mistake is bigger first.
However, one point that I agree with that might lead to this war being worse: the Gulf are showing some serious buyers remorse with sticking in the US orbit. Both the uselessness of America’s strategy and the almost clear prejudice Trump shows towards the Arabs vs Israel in the decision tree of this conflict is unsettling for the Gulf states.
Winning for Iran, their whole strategy, is that their pressure on the straight hurts the US and world economy to a devastating level.
What the US is gearing up for right now is a multiyear war where the US military goes into the island tunnels and tries to hold the Straight open by force.
It'll force American to negotiate with Iran and China/India will be the mediators. It will be the beginning of the end of the Petrodollar and likely force America to leave the Middle East. It will empower Russia, China, and India while hurting US interests. I don't know why we started this war at all other than to serve Israel's interests even when it means harming our own.
Explain how the US would even approach or even be made to forcibly accept the idea of bowing to another country, especially those three? They are not the average European country and do not behave like them.
>Explain how the US would even approach or even be made to forcibly accept the idea of bowing to another country, especially those three? They are not the average European country and do not behave like them.
We don't control the Middle East--as proven by Afghanistan, Iraq, Syria, Libya, etc. We definitely can't control the Strait of Hormuz and Iran can choke off 20% of of the world's energy/fertilizer. They will inflict global pain on the economy and we're nearly out of interceptor missiles, but Iran can keep producing cheap drones faster than we can re-arm interceptor missiles. America won't be able to end the conflict without China and India helping to negotiate with Iran. We've already cut sanctions on Russian oil... this is not helping America it's just empowering Russia, China, India, and Iran. The end result of this will be Iran will end up taking a toll on all goods allowed to pass by the Strait of Hormuz, sections on Russia will be dropped, and Iran will sell oil in Chinese yuan. So yeah, this will hurt the US--but I actually think that was Israel's plan all along. They want to control the Middle East and for the US to withdraw and be unable to dominate the region.
The ambassador to Israel is a Christian Zionist who believes in the rapture. The secretary of defense is a crazy person with a crusades tattoo. They would burn the USA down to the ground if it meant moving their insane superstitious agenda forward. Is it forwarding Israel's interests? Yeah. Are they doing it because they love Israel and the Jewish people? Not a chance. Isn't the Rapture cool?
I suspect Hegseth and other officials will be replaced when Trump internalizes how unpopular this war is and needs a scapegoat to facilitate a pivot. He's already blaming other people in his administration for anything that's going wrong.
Even if his officials are ideologically stable and consistent, he himself isn't.
I don't think he cares? He's going to cash out after this and his donors will make sure he is paid handsomely for this. He can't run again and Israel just took 10% of Lebanon and is poised to be the great regional power. They're already talking about Turkey and Pakistan as the new threats... They will just keep moving the goalposts until it stops working. I have no clue where this ends, but Iran could end up buying a nuclear weapon from Pakistan if this keeps heating up.
That is kind of his style. And then we have "anti-war" voices like future president Tucker Carlson who refuses to say Trump's name when criticizing US foreign policy. It just gives him room to say "it wasn't my fault, aren't I great?"
Misleading headline: Fink said that "years of above $100, closer to $150 oil" would trigger recession. Which, well, duh, but it's quite different from the implication that even a momentary peak would trigger that.
I also do wonder if oil prices would actually stay high even if the Strait of Hormuz stayed closed for years. Many analysts think that as a planet we're already past peak oil demand, and the price spike has turbocharged the transition to EVs (where I live, every EV dealer is flat out and waiting times are months). High prices also spur more production from everybody else. The tricky bit is specialist fuels like jet fuel, where you can't just turn a tap to make more.
Was looking at EVs last weekend, slightly accelerating a purchase that was going to be made soon anyway and, yep, there is plenty of additional interest as a result of current fuel prices / availability.
EVs were only going to grow in popularity anyway, but this feels like it's jumped the adoption curve up a peg or two immediately.
What I'm interested in seeing is whether infrastructure can scale with the additional interest. And I don't think it will because the the current government is already planning to add an "EV tax" to make up for the fuel excise, and the opposition government (if/when it gets back in) is owned by the fossil fuel lobby, and so they'll be doing whatever they can to slow it down.
The beauty of EVs is that the infrastructure is for most part very decentralized. Anybody with a house can charge at home, using cheap off-peak power at night and/or solar panels during the day.
Obviously there's work to be done on charging in apartments and highways, but this is a more tractable problem than (say) trying to double hydrogen or even gasoline filling stations overnight.
The infrastructure in question is DC fast chargers. Yes, you can charge at home if you have a house, with a parking space reachable with an EVSE, and your commute is short enough that you can fully recharge by the next commute, and nobody needs the car after hours when you'd otherwise be charging it, and you never take road trips or longer-than-usual drives.
Everyone else is, to a greater or lesser extent, at the mercy of the DCFC infrastructure, and it is sorely lacking in many places - even ones you'd expect it to be pretty good.
Your picture is not an accurate picture of what it's like for most people - you frame the exceptions as if it's the normal case.
Most people who have a driveway or garage where they can install an EVSE (or an apartment complex where the parking has chargers) don't even need to charge every day. Depending on the commute it could even be just two or three times a week. It would usually only be when your only option is trickle charging out of a standard wall outlet that you are in the 'might not be able to charge in time for the next drive' territory, not with EVSE where you can get 7 kW single phase or 11 kW three-phase with most cars (some cars can do up to 22 kW with three phase but that's rare for them to support that on AC charging and it would be rare to have an EVSE that could do that power at home).
A 2kW socket for ten hours over night will give you a hundred kilometers of range or so. A regular 11kW wall box can fully charge your car over night. How long is the typical commute you're thinking about? Fast charging is pretty much irrelevant day-to-day for people who can plug in at home or at work. The only time these people need fast chargers is during road trips.
I'm in the privileged position that I have solar panels and can charge in the garage. I only just had a conversation with someone who was considering an EV, but their 'housing configuration' doesn't support it, it just wasn't feasible purely from a charging perspective in their situation.
More public infrastructure, and knowledge of the presence of said infrastructure would open up EVs to a wider set of use cases. It's almost the 'confidence' in the suitability of EVs that needs to be worked on.
This is absolutely true, but IMO also a much smaller problem than some people are making it out to be.
Without any special car-charging equipment, just with a regular outlet, I'm able to get over 100 miles of range every night (charging only from 11pm to 7am).
This is enough for a pretty long daily commute and it doesn't block car use during normal hours.
Big disclaimer - I'm from Europe, which helps my case because of shorter commutes and faster home charging with 220 volts.
But at the end of the day I think the solution lies in equipping all parking spaces at home and at work with power outlets. DCFC is definitely needed, but should be viewed as a solution for exceptional cases (i.e. roadtrip that exceeds your range), not a gas station for EVs.
It’s hilarious that the greenies who live in dense urban areas have a harder time charging their EV than folks who live in the burbs. I’m thinking of putting in a second EV charger so I can charge two cars at once.
Hah, yes, of course, I'm falling into the FUD trap.
What I meant to say was the kind of infrastructure that defeats some of the FUD around EVs, such as chargers at rest stops along highways, in parking lots, hotel/motel car parks, etc. Chargers could/should become a value-add for businesses that survive on servicing road-trip transient customers.
> Anybody with a house can charge at home, using cheap off-peak power at night and/or solar panels during the day.
Yes! This is decentralised, existing infrastructure, and that should neither be forgotten nor understated: the ubiquity of 'the lowly power point' is greater than that of the fuel nozzle (in complete awareness of the relatively large disparity between charging time and refueling time, which is a whole can of worms on its own).
Thousands and thousands of miles of high voltage cables transformers and super expensive chargers sounds easy to you?
A gas station just needs a tank and a pump. You can put it anywhere and can operate with a small generator if 110V electricity is not available. Even as a country you don’t need infra. Just some trucks to import from the closest refinery/ port
Yes, if you're rolling it out for a single charger in the middle of nowhere.
My understanding is that much of the grid already exists if there is a town or even just a rest stop present, it likely has grid power. I will grant that this doesn't speak to the suitability of said existing infrastructure for running one or a number of a high voltage / high speed chargers.
> Just some trucks to import from the closest refinery/ port
Vehicles will be visiting the gas station anyway ? Aka the road-like infrastructure will need to be there.
I do not try to claim that trucking fuel over long distances is efficient. Just stating that gas stations themselves need no additional infrastructure.
I mean, if you consider "building the whole gas station" to be the infrastructure, then sure, but building a gas station requires significantly more complex infrastructure than installing an EV charger or two.
You need to install several specialized sealed tanks underground, and the pumps that will get the gas & diesel (and sometimes kerosene) in them up to the cars.
You then need to be able to make secure, safe deliveries of highly flammable liquids to the site regularly, forever.
Once an EV charger has been installed, it'll need occasional maintenance, and if some yahoos vandalize it it might need repair or replacement, but otherwise it's pretty much good to go, potentially for decades.
The majority of the oil currently produced is used in things other than consumer vehicles [0] [1] [2], so switching to EVs wouldn't completely solve the problem (although it would make a huge difference). Plus, ~20% of oil is used to make chemicals [1] [2], and there aren't really any feasible alternatives here, so we're going to continue to need lots of oil for the foreseeable future (but if we stop burning the other 80% of it, then that 20% should get a lot cheaper, and fully-domestic production might be possible).
Consumer vehicles are the single biggest use, though, and transportation in general is 62% by your first link.
The biggest non-consumer transportation usage is trucks, and I expect them to electrify relatively quickly. Trucking is a low margin business and fuel is their biggest expense.
> there aren't really any feasible alternatives here
It's not feasible yet, but I really hope that carbon sequestration comes into play here. Plastic lasts a really long time, so turning CO2 into plastic is one way to go carbon negative.
There are already ways to make some of the chemicals (largely plastics) being made from petroleum derivatives using renewable sources, like vegetable oils. I don't pretend to know much about the details—at any level—so I don't know if it's feasible to come up with bio-based replacements for all the derivatives if the economics shift to support it, but it's at least something worth looking into.
The impact of the Strait of Hormuz being closed goes well beyond oil. Here are a few off the top of my head:
- Qatar produces 20-33% of the world's helium;
- The supply chain for ~30 of the world's fertilizer relies upon supply chains going through the Strait of Hormuz. How do you feel about 10-20% food inflation?
- ~20% of the world's LNG passes through the STrait. Let's see how that bites come (NOrthern Hemisphere) winter;
- Many Asian countries are wholly reliant on Gulf oil for electricity and fuel; and
- Roughly ~20% of California's oil comes from Iraq. The US is the world's largest single oil and gas producer but that doesn't really matter when California has blocked any pipelines into the state such that ~75% of their oil arrives by ship.
Oil demand to a point is fairly inelastic but once you get beyond about $120-130 you start getting into destructive demand. Fuel prices really spike and in many places, it's going to severely disrupt electricity.
There are many fuel usages for which we have no alternative, namely shipping and aviation. Oh and a lot of heavy machinery and industrial uses of diesel.
Additionally, there are significant (at least 25% of the total) non-energy uses. Construction, plastic, roads, etc.
Weaning ourselves off of fossil fuels is a decades-long project and only China really is trying to do that. I suspect only China has the long-term supply chains, willpower and commitment to pull off that kind of national project.
The main thing that worries me about the use of fossil fuels is the heavy machinery where said heavy machinery is used for farming food.
There are service stations in rural Victoria that have run out of petrol[0]. If farmers can't run their machines, I don't want to continue that train of thought. I would hope that governments would obviously prioritise food production and distribution over, kinda everything else, but logic and government seem to have a strange relationship.
What is also true is that media has been saying both:
- Don't panic buy, we've got plenty
- We'll start running out in mid-April.
So, unlike TP during COVID, which can be manufactured locally, there is a dark cloud on the horizon and precious little to encourage any optimism regarding the Strait of Hormuz.
They're destroying oil production and distribution capacity daily. This is likely the last time we will see oil prices this low. It's only going up from here. Oh and choking off the supply of fertilizer will drive up food prices... so we're looking at sharp increases in fuel and food prices--basically everything will be impacted. Oh and the Valero refinery in Texas conveniently caught fire today. Prices are going up and staying there. Supply chains will be destroyed and Iran will require a toll to be paid in the future--this will further drive prices up.
TBH if US had it's shit together and sorted out refinery mismatch it can coast along as CONUS crude island with WTI prices of $40-60, but that's 7-10 year resolution. On paper if Trump sequenced refinery build out during Trump1, US can afford to toast gulf oil and be relatively insulated vs global prices... well not just insulated but have huge energy price advantage. There was lightcone where US could blow up global energy and be net benefactor, I guess thank god evil is stupid sometimes.
It's guaranteed access but I think still paying close to benchmark price (relative sludge tier VZ oil) because Trump likely can't/won't compel Chevron to sell at discount for getting VZ up and running. Ironically if oil still under VZ control, US could have probably pressed PDVSA to sell at discount more than Chevron.
Fortunately, this won't happen. Trump is a populist. The war will end simply because the repercussions are far too great. And even though Israel would like to see the deaths of others continue indefinitely, they are still too small and too weak and too dependent on the US to go it alone.
Is it going to be a GFC style crash where I want my assets in currency denominated investments (e.g. bonds) to buy assets at crazy low values or is it going to be mega-inflation where I want my assets in commodities and stocks?
I am not going to use this strategy but my guess is first the first then the second. Stocks seem to be already on very high levels. Commodities might fare less well as oil is major input. So high prices probably lead to less demand to lower prices or at least combating the cost increases from oil as input.
If there was a definitive answer to this, don't you think that the markets would already have moved to account for it?
But they did! Look at the gold price.
Not just the price, the physical volumes. China's central bank has been discounting their bonds beyond what the market can support in order to get more free cash to buy up as much metal as possible as soon as possible, to the point that people are making millions this month just in the arbitrage from buying up everything in the London and Chicago exchanges to give to China.
I have no idea, so I have short term bonds, and gold, and commodities, to diversify.
Just keep in mind that we've had three 20% drawdowns in the past five-ish years that have all recovered. Even if we do have a crash, I don't think it'll last long. But, this war has thrown a wrench into things and I don't think AI spending can carry us through this year, so who knows.
Ah, HN.
"There's likely to be a global recession, driving millions of people to destitution and starvation and thousands to death. How can I profit from this?!!!"
Wait, what?!? Nothing about trying to strategically put yourself in an ideal situation during a recession is going to make anyone else worse off. Much of this isn't zero-sum, and assuming the investments are not rent seeking.
If I were to invest in potatoes because I thought people might need potatoes, then there should be an incentive to make more potatoes, and if people need potatoes, then more potatoes are likely to exist... which helps people get food.
If I instead concern myself with clutching my pearls and tightly as I can, and I don't invest in potatoes, then there is less of an incentive to make more potatoes, fewer people are able to buy the limited supply of potatoes, and everyone is poorer for it.
I think it's more protecting ones wealth rather than profit. But sure, I guess only people on HN try to do that.
This is a live test that the world is not ready to wean from fossil fuels.
It’ll trigger a lot of political pressure which in turn will trigger more war
Expensive oil has a lot of repercussions
Many people believe the root cause of the Arab Spring set of insurrections and wars was food inflation. And it's now a lot more expensive then what kicked off the Arab Spring.
The difference with oil inflation is that it also directly boosts revenues in oil-producing Middle Eastern countries.
Consequently, they can offset core staple inflation (and usually choose to) to decrease unrest.
It's core inflation without high oil prices that torpedoes their fiscal options.
Perhaps it makes it less likely in the middle East, but it makes it much more likely in countries vulnerable to both oil & food price inflation.
The immigration crisis caused by Arab spring toppled many governments in Europe.
If a similar set of crises happened in the Americas it would make the US's illegal immigration situation much worse.
Either that, or it will force most countries to electrify their economies, which has made economic + ecological sense for decades.
The oil interests will do everything they can to fight it. (Like buying off Trump, which probably had a lot to do with us starting the Iran war, and is certainly why we're cancelling many affordable energy build outs in the face of widespread shortages.)
Less corrupt economies will pull ahead, and technological progress will bifurcate. The US will probably be on the wrong side of this. China will probably be on the right side.
How quickly could we electrify our economies and what dent in oil dependence could be made with a will?
I doubt people here can give realistic estimates as to how quickly we can ramp up the production of e.g. heat pumps, since a lot depends on how much we're willing to pay for it. There are many areas where we have the technology to electrify, we just don't do it because at current fuel prices pay back times for electrification are too long. There are also simple things like better insulation for buildings that can dramatically reduce fuel demands.
The US produces much more natural gas than it consumes, so changes like this don't really make sense.
Europe started implementing these initiatives a couple of decades ago, it makes sense there as they are a net importer, with residential prices around 3x higher than the US. In my country a newly built house (very low energy demand) is often cheaper to heat with a heat pump than natural gas, especially if combined with solar PV - but that's still more expensive than a home in the US.
The most impactful usages are transportation, as everywhere basically everything is transported by road, and renewable electricity generation, so fossil fuels can be used elsewhere (residential, industrial, etc).
Europe, particularly Germany, has quite a will. Maybe a little faster than that given there are lessons to be gleaned from it.
> Like buying off Trump, which probably had a lot to do with us starting the Iran war...
Oil companies have actually not benefited from America's middle-eastern wars. America's regime-change wars have made the region less profitable for US oil companies. Why invest in infrastructure in countries with unstable regimes, or risk of infrastructure becoming a target?
If anything, energy companies would benefit from the sanctions on Iran being lifted, so they could invest in infrastructure there, or buy gas from Iran.
I hope one day this silly 'war for oil' meme will disappear.
cough Russia cough
> Like buying off Trump
That’s a weird thing to say considering that the Iran hostage crisis helped swing an election almost half a century ago. It’s not like nobody thought about going to Iran until someone bribed Trump to do it.
The far more rational theory is that Trump did it to deflect from his failure to combat inflation domestically. They made an entire movie about his. (Wag the Dog.)
This war of choice is going to redefine the US's policy and relationships with Middle East, China, Russia and Europe for the rest of the century. Even if it ends tomorrow. Mainly because the only way it ends tomorrow is if sanctions on Iran are lifted. And they should be lifted anyway so I'd be a fan of that.
China, Iran and Russia look to the the big winners here. Everyone else is a loser, the US the biggest loser of them all. In history books I think this will go down as the biggest geopolitical miscalculation and mistake in US history of anything to date and it's not even close.
The Middle East consists of a bunch of US client states where arms are used to maintain fealty. The US gives arms to a despotic regime who enrich themselves off of their country's natural resources and they use those arms to stay in power.
This last month has shown the US security guarantee to the Gulf to be a paper tiger. This is a seismic potential rift between the US and Israel. This war of choice has undermined relationship with long-term allies (eg in Europe) who were never consulted and never approved of this war and may suffer with significantly higher electricity prices as a result.
This is a Napoleon invading Russia level of blunder.
> biggest geopolitical miscalculation and mistake in US history of anything to date and it's not even close
Bigger than Iraq?
Unquestionably.
As weird as this sounds, militarily and strategically, Iraq was a relative "success". I mean not to the thousands or millions harmed or killed by US actions and all the damage done along the way, but Iraq now does a US-friendly regime and it exports oil to the US and a bunch of allies. Should we have done it? No. Was it worth the price? No. But was it a complete failure? Also, no.
Unlike Iraq, there's no way to invade Iran. it's surrounded by mountains on 3 sides and ocean on the third. It's a country is ~93 million people with a regime and a military specifically designed to resist US bombardment and interference. The chokehold it has on the Strait of Hormuz is currently being demonstrated. And there's nothing the US can do about that.
If the leaked terms of the 15 point plan are true (and that's a big IF) and any end to hostilities looks remotely like that, Iran is going to end up in a substantially better position than they had under the JCPOA and sanctions will also likely end. That's now the price of peace.
And in doing that the US has worsened and likely will redefine its relationship to every country from Spain to Japan.
It is the biggest own goal in US history.
> And there's nothing the US can do about that.
1. Send Marines to seize Kharg island via long range air assault from 2 ARGs + land bases
2. Flood Kharg-adjacent mainland with tactical aviation to eliminate short range artillery and rocket systems
3. Fortify position on Kharg island and declare all oil revenue will be placed in US-controlled holding account, with release to Iran contingent on cooperation (re: Why occupy Kharg? Because then you have actual money in an account as leverage, while calming international oil prices and consumers, not just a blockade, which antagonizes international oil consumers)
4. Declare a buffer demilitarized zone around the Strait of Hormuz
5. Land Marines in buffer zone if necessary to monitor
~50% of the revenue to pay the Iranian military comes from oil exports. Therefore, the Iranian regime doesn't survive without oil export revenue. 90% of Iranian oil is exported through Kharg.
It's an aggressive plan, but it's feasible.
Especially because Iran has no ability to repel an invasion of the island or retake it once it's occupied.
Their only possible reaction would be to bombard troops there, destroying their own export infrastructure in the process.
Which would depend on how close to the mat the current regime wants to take this, as that would also seal their eventual downfall.
I don’t disagree with any of your assessments, but I don’t know if it’s a bigger mistake than Iraq…yet. That war was a 10 year (longer if you bc point ISIS) debacle that cost trillions.
Let’s wait a few years before saying this mistake is bigger first.
However, one point that I agree with that might lead to this war being worse: the Gulf are showing some serious buyers remorse with sticking in the US orbit. Both the uselessness of America’s strategy and the almost clear prejudice Trump shows towards the Arabs vs Israel in the decision tree of this conflict is unsettling for the Gulf states.
Not sure how iran is winning while getting destroyed. It'll be another refugee crisis
Winning for Iran, their whole strategy, is that their pressure on the straight hurts the US and world economy to a devastating level.
What the US is gearing up for right now is a multiyear war where the US military goes into the island tunnels and tries to hold the Straight open by force.
It'll force American to negotiate with Iran and China/India will be the mediators. It will be the beginning of the end of the Petrodollar and likely force America to leave the Middle East. It will empower Russia, China, and India while hurting US interests. I don't know why we started this war at all other than to serve Israel's interests even when it means harming our own.
Explain how the US would even approach or even be made to forcibly accept the idea of bowing to another country, especially those three? They are not the average European country and do not behave like them.
>Explain how the US would even approach or even be made to forcibly accept the idea of bowing to another country, especially those three? They are not the average European country and do not behave like them.
We don't control the Middle East--as proven by Afghanistan, Iraq, Syria, Libya, etc. We definitely can't control the Strait of Hormuz and Iran can choke off 20% of of the world's energy/fertilizer. They will inflict global pain on the economy and we're nearly out of interceptor missiles, but Iran can keep producing cheap drones faster than we can re-arm interceptor missiles. America won't be able to end the conflict without China and India helping to negotiate with Iran. We've already cut sanctions on Russian oil... this is not helping America it's just empowering Russia, China, India, and Iran. The end result of this will be Iran will end up taking a toll on all goods allowed to pass by the Strait of Hormuz, sections on Russia will be dropped, and Iran will sell oil in Chinese yuan. So yeah, this will hurt the US--but I actually think that was Israel's plan all along. They want to control the Middle East and for the US to withdraw and be unable to dominate the region.
The ambassador to Israel is a Christian Zionist who believes in the rapture. The secretary of defense is a crazy person with a crusades tattoo. They would burn the USA down to the ground if it meant moving their insane superstitious agenda forward. Is it forwarding Israel's interests? Yeah. Are they doing it because they love Israel and the Jewish people? Not a chance. Isn't the Rapture cool?
I suspect Hegseth and other officials will be replaced when Trump internalizes how unpopular this war is and needs a scapegoat to facilitate a pivot. He's already blaming other people in his administration for anything that's going wrong.
Even if his officials are ideologically stable and consistent, he himself isn't.
lol he's been blaming everyone else since he was elected for any issue. He isn't the type of person to accept responsibility for anything.
I don't think he cares? He's going to cash out after this and his donors will make sure he is paid handsomely for this. He can't run again and Israel just took 10% of Lebanon and is poised to be the great regional power. They're already talking about Turkey and Pakistan as the new threats... They will just keep moving the goalposts until it stops working. I have no clue where this ends, but Iran could end up buying a nuclear weapon from Pakistan if this keeps heating up.
That is kind of his style. And then we have "anti-war" voices like future president Tucker Carlson who refuses to say Trump's name when criticizing US foreign policy. It just gives him room to say "it wasn't my fault, aren't I great?"
Perhaps you joke, but does Tucker really have a chance at the Presidency?
He'd have a better chance than most.
Misleading headline: Fink said that "years of above $100, closer to $150 oil" would trigger recession. Which, well, duh, but it's quite different from the implication that even a momentary peak would trigger that.
I also do wonder if oil prices would actually stay high even if the Strait of Hormuz stayed closed for years. Many analysts think that as a planet we're already past peak oil demand, and the price spike has turbocharged the transition to EVs (where I live, every EV dealer is flat out and waiting times are months). High prices also spur more production from everybody else. The tricky bit is specialist fuels like jet fuel, where you can't just turn a tap to make more.
Was looking at EVs last weekend, slightly accelerating a purchase that was going to be made soon anyway and, yep, there is plenty of additional interest as a result of current fuel prices / availability.
EVs were only going to grow in popularity anyway, but this feels like it's jumped the adoption curve up a peg or two immediately.
What I'm interested in seeing is whether infrastructure can scale with the additional interest. And I don't think it will because the the current government is already planning to add an "EV tax" to make up for the fuel excise, and the opposition government (if/when it gets back in) is owned by the fossil fuel lobby, and so they'll be doing whatever they can to slow it down.
The beauty of EVs is that the infrastructure is for most part very decentralized. Anybody with a house can charge at home, using cheap off-peak power at night and/or solar panels during the day.
Obviously there's work to be done on charging in apartments and highways, but this is a more tractable problem than (say) trying to double hydrogen or even gasoline filling stations overnight.
The infrastructure in question is DC fast chargers. Yes, you can charge at home if you have a house, with a parking space reachable with an EVSE, and your commute is short enough that you can fully recharge by the next commute, and nobody needs the car after hours when you'd otherwise be charging it, and you never take road trips or longer-than-usual drives.
Everyone else is, to a greater or lesser extent, at the mercy of the DCFC infrastructure, and it is sorely lacking in many places - even ones you'd expect it to be pretty good.
Your picture is not an accurate picture of what it's like for most people - you frame the exceptions as if it's the normal case.
Most people who have a driveway or garage where they can install an EVSE (or an apartment complex where the parking has chargers) don't even need to charge every day. Depending on the commute it could even be just two or three times a week. It would usually only be when your only option is trickle charging out of a standard wall outlet that you are in the 'might not be able to charge in time for the next drive' territory, not with EVSE where you can get 7 kW single phase or 11 kW three-phase with most cars (some cars can do up to 22 kW with three phase but that's rare for them to support that on AC charging and it would be rare to have an EVSE that could do that power at home).
A 2kW socket for ten hours over night will give you a hundred kilometers of range or so. A regular 11kW wall box can fully charge your car over night. How long is the typical commute you're thinking about? Fast charging is pretty much irrelevant day-to-day for people who can plug in at home or at work. The only time these people need fast chargers is during road trips.
It is a good point.
I'm in the privileged position that I have solar panels and can charge in the garage. I only just had a conversation with someone who was considering an EV, but their 'housing configuration' doesn't support it, it just wasn't feasible purely from a charging perspective in their situation.
More public infrastructure, and knowledge of the presence of said infrastructure would open up EVs to a wider set of use cases. It's almost the 'confidence' in the suitability of EVs that needs to be worked on.
This is absolutely true, but IMO also a much smaller problem than some people are making it out to be.
Without any special car-charging equipment, just with a regular outlet, I'm able to get over 100 miles of range every night (charging only from 11pm to 7am).
This is enough for a pretty long daily commute and it doesn't block car use during normal hours.
Big disclaimer - I'm from Europe, which helps my case because of shorter commutes and faster home charging with 220 volts.
But at the end of the day I think the solution lies in equipping all parking spaces at home and at work with power outlets. DCFC is definitely needed, but should be viewed as a solution for exceptional cases (i.e. roadtrip that exceeds your range), not a gas station for EVs.
It’s hilarious that the greenies who live in dense urban areas have a harder time charging their EV than folks who live in the burbs. I’m thinking of putting in a second EV charger so I can charge two cars at once.
Hah, yes, of course, I'm falling into the FUD trap.
What I meant to say was the kind of infrastructure that defeats some of the FUD around EVs, such as chargers at rest stops along highways, in parking lots, hotel/motel car parks, etc. Chargers could/should become a value-add for businesses that survive on servicing road-trip transient customers.
> Anybody with a house can charge at home, using cheap off-peak power at night and/or solar panels during the day.
Yes! This is decentralised, existing infrastructure, and that should neither be forgotten nor understated: the ubiquity of 'the lowly power point' is greater than that of the fuel nozzle (in complete awareness of the relatively large disparity between charging time and refueling time, which is a whole can of worms on its own).
Infrastructure for ev charging is a lot easier to add than gas stations though.
Thousands and thousands of miles of high voltage cables transformers and super expensive chargers sounds easy to you?
A gas station just needs a tank and a pump. You can put it anywhere and can operate with a small generator if 110V electricity is not available. Even as a country you don’t need infra. Just some trucks to import from the closest refinery/ port
Most of those cables are already in place and powered up for the existing power grid.
Yes, if you're rolling it out for a single charger in the middle of nowhere.
My understanding is that much of the grid already exists if there is a town or even just a rest stop present, it likely has grid power. I will grant that this doesn't speak to the suitability of said existing infrastructure for running one or a number of a high voltage / high speed chargers.
> Just some trucks to import from the closest refinery/ port
Driving thousands and thousands of miles.
Vehicles will be visiting the gas station anyway ? Aka the road-like infrastructure will need to be there.
I do not try to claim that trucking fuel over long distances is efficient. Just stating that gas stations themselves need no additional infrastructure.
I mean, if you consider "building the whole gas station" to be the infrastructure, then sure, but building a gas station requires significantly more complex infrastructure than installing an EV charger or two.
You need to install several specialized sealed tanks underground, and the pumps that will get the gas & diesel (and sometimes kerosene) in them up to the cars.
You then need to be able to make secure, safe deliveries of highly flammable liquids to the site regularly, forever.
Once an EV charger has been installed, it'll need occasional maintenance, and if some yahoos vandalize it it might need repair or replacement, but otherwise it's pretty much good to go, potentially for decades.
The majority of the oil currently produced is used in things other than consumer vehicles [0] [1] [2], so switching to EVs wouldn't completely solve the problem (although it would make a huge difference). Plus, ~20% of oil is used to make chemicals [1] [2], and there aren't really any feasible alternatives here, so we're going to continue to need lots of oil for the foreseeable future (but if we stop burning the other 80% of it, then that 20% should get a lot cheaper, and fully-domestic production might be possible).
[0]: https://www.eia.gov/energyexplained/oil-and-petroleum-produc...
[1]: https://www.iea.org/data-and-statistics/charts/oil-demand-by...
[2]: https://www.statista.com/statistics/307194/top-oil-consuming...
Consumer vehicles are the single biggest use, though, and transportation in general is 62% by your first link.
The biggest non-consumer transportation usage is trucks, and I expect them to electrify relatively quickly. Trucking is a low margin business and fuel is their biggest expense.
> there aren't really any feasible alternatives here
It's not feasible yet, but I really hope that carbon sequestration comes into play here. Plastic lasts a really long time, so turning CO2 into plastic is one way to go carbon negative.
There are already ways to make some of the chemicals (largely plastics) being made from petroleum derivatives using renewable sources, like vegetable oils. I don't pretend to know much about the details—at any level—so I don't know if it's feasible to come up with bio-based replacements for all the derivatives if the economics shift to support it, but it's at least something worth looking into.
it's used to make plastic, which has its own set of pros and cons.
The impact of the Strait of Hormuz being closed goes well beyond oil. Here are a few off the top of my head:
- Qatar produces 20-33% of the world's helium;
- The supply chain for ~30 of the world's fertilizer relies upon supply chains going through the Strait of Hormuz. How do you feel about 10-20% food inflation?
- ~20% of the world's LNG passes through the STrait. Let's see how that bites come (NOrthern Hemisphere) winter;
- Many Asian countries are wholly reliant on Gulf oil for electricity and fuel; and
- Roughly ~20% of California's oil comes from Iraq. The US is the world's largest single oil and gas producer but that doesn't really matter when California has blocked any pipelines into the state such that ~75% of their oil arrives by ship.
Oil demand to a point is fairly inelastic but once you get beyond about $120-130 you start getting into destructive demand. Fuel prices really spike and in many places, it's going to severely disrupt electricity.
There are many fuel usages for which we have no alternative, namely shipping and aviation. Oh and a lot of heavy machinery and industrial uses of diesel.
Additionally, there are significant (at least 25% of the total) non-energy uses. Construction, plastic, roads, etc.
Weaning ourselves off of fossil fuels is a decades-long project and only China really is trying to do that. I suspect only China has the long-term supply chains, willpower and commitment to pull off that kind of national project.
The main thing that worries me about the use of fossil fuels is the heavy machinery where said heavy machinery is used for farming food.
There are service stations in rural Victoria that have run out of petrol[0]. If farmers can't run their machines, I don't want to continue that train of thought. I would hope that governments would obviously prioritise food production and distribution over, kinda everything else, but logic and government seem to have a strange relationship.
[0]: https://www.abc.net.au/news/2026-03-24/victorian-petrol-stat...
They're run out of fuel for the same reason we ran out of TP during COVID: hoarding, not lack of supply.
That is true.
What is also true is that media has been saying both:
- Don't panic buy, we've got plenty
- We'll start running out in mid-April.
So, unlike TP during COVID, which can be manufactured locally, there is a dark cloud on the horizon and precious little to encourage any optimism regarding the Strait of Hormuz.
They're destroying oil production and distribution capacity daily. This is likely the last time we will see oil prices this low. It's only going up from here. Oh and choking off the supply of fertilizer will drive up food prices... so we're looking at sharp increases in fuel and food prices--basically everything will be impacted. Oh and the Valero refinery in Texas conveniently caught fire today. Prices are going up and staying there. Supply chains will be destroyed and Iran will require a toll to be paid in the future--this will further drive prices up.
TBH if US had it's shit together and sorted out refinery mismatch it can coast along as CONUS crude island with WTI prices of $40-60, but that's 7-10 year resolution. On paper if Trump sequenced refinery build out during Trump1, US can afford to toast gulf oil and be relatively insulated vs global prices... well not just insulated but have huge energy price advantage. There was lightcone where US could blow up global energy and be net benefactor, I guess thank god evil is stupid sometimes.
US is set to double+ its LNG production before 2029 so at least that is covered
https://nitter.net/jackprandelli/status/2036210941373591828#...
EDIT: btw does your username mean you have a big ass?
Not the parent but from a weight training perspective it would mean maximum glute muscle activation.
He took the easy way and invaded Venezuela for that. Less prep needed, less scruples needed.
It's guaranteed access but I think still paying close to benchmark price (relative sludge tier VZ oil) because Trump likely can't/won't compel Chevron to sell at discount for getting VZ up and running. Ironically if oil still under VZ control, US could have probably pressed PDVSA to sell at discount more than Chevron.
Fortunately, this won't happen. Trump is a populist. The war will end simply because the repercussions are far too great. And even though Israel would like to see the deaths of others continue indefinitely, they are still too small and too weak and too dependent on the US to go it alone.
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He lost me at the part where he said AI wasn’t a bubble…
Other than the overblown headline, Fink has a strong interest (as in 100%) in not causing market panic.
The statement about oil prices is probably a public statement to Trump to "get this situation resolved ASAFP, I've told you what will happen!".