Oil Markets Adjust

NY Times opinion argues what I said over a month ago: Iran loses leverage every day they terrorize the straits closed. 

What happens? Oil prices go up. Consumers react by using less oil. Countries ration. Higher prices. With higher prices, consumers seek out new sources and invest in new sources, like pipelines, etc. Is it a gigantic pain the ass? Yes. Is it expensive? Yes. But it will happen. We should and could obviously cut all gasoline and oil taxes that were once meant to curb consumption since we are no longer in an abundance scenario. 

The IRGC hardliners hope and pray it will send the world into a recession. They certainly do not know any more about the world economy than the rest of us, so they are bankrupting themselves and impoverishing their own country, gambling on a particular short-term outcome. Maybe they will prevail temporarily. I personally doubt it.