"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?!!!"
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.
Even if his officials are ideologically stable and consistent, he himself isn't.
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.
Expensive oil has a lot of repercussions
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.
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.
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.)
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.
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.
[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...
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.
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.
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.
- 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.
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...
https://nitter.net/jackprandelli/status/2036210941373591828#...
EDIT: btw does your username mean you have a big ass?
yes suppose to be maximize gluteus as squat joke but maxglute for brevity.
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!".
