Iran renewed its oft-repeated threat to close the Strait of Hormuz 2 days ago. This in response to the US cranking up sanctions to cut off all Iranian oil exports. Markets and analysts shrugged. Iran’s made this threat before and never followed through. Why would it be different this time?
But the sanctions are different. The response could be too.
The US is seeking to cut off ALL oil exports by Iran. Its questionable if that will succeed. But lets assume it does.
We cut off Iran’s ability to export oil. Holding the Iranian economy hostage to achieve our (to me unclear) goals
Iran, backed into a corner with nothing to lose, takes the global economy hostage in response. Iran cuts off the Strait of Hormuz. “At its narrowest, the strait has a width of 21 nautical miles (39 km). About 20% of the world’s petroleum (about 35% of the petroleum traded by sea) passes through the strait.”
All hell breaks loose. Oil prices spike. Gas lines re-appear. Markets crash. Plagues of locusts. Etc…
Or maybe not. But its worth considering. Particularly given this administration. Trump has so far been lucky to avoid an improvisational, not-thinking-through-the-full-consequences, crisis. This could be where our luck runs out.