News Source
EXCERPT:
… The U.S. ‘blockade’ of Iranian ports around the Strait of Hormuz (SOH) is under a week old. When the U.S. naval blockade was announced, some worried it would make things worse by further enraging Iran or the rogue Iranian military, who may then attack ship traffic, ports, or people. Thankfully, it’s been relatively calm. However we may be just one drone strike, one stray Iranian missile, or one nasty Hormuz mine blast from an escalation. An assault directly on an American warship would send oil prices soaring. It’s a scary and tentative time.
That said…
MY TAKE → The Strait of Hormuz is not as important to global energy as it was just a few weeks ago. Here’s why. Over the past few years, both Saudi Arabia and the UAE have very smartly built back-up pipelines. Those pipelines – a whopping 7 million barrels per day capacity in Saudi and about 1.5 million per day flowing across the UAE have – have cut the flow of shipborne oil out of the Hormuz by half.
We know the Strait matters massively to more than just oil. I’ve been very clear on concerns about shortages of fertilizer, jet fuel, other refined products and even helium for semiconductor manufacturing. Even if the Strait returns to pre-war shipping levels soon – by the way, something absolutely no one is counting on – it could take months to get back to any state of normal for energy and related supply chains.