economy
Why Trump Thinks He Can Walk Away From the Strait of Hormuz
The U.S. is feeling much less pain than its allies are.
TL;DR
- The current oil supply shock is estimated to be three times larger than the 1970s Arab oil embargo.
- The U.S. is largely insulated from the economic consequences due to its energy superpower status.
- Asia and Europe are bearing the brunt of the crisis, with significant price increases for oil and LNG.
- President Trump views the crisis as not America's problem, stating the U.S. imports little oil through the Strait of Hormuz.
- Allies in Asia, like the Philippines and Japan, are taking extreme measures, including states of emergency and service cutbacks.
- European countries, especially Britain and Italy, are heavily impacted due to reliance on gas-fired power plants.
- The crisis benefits U.S. adversaries, potentially bailing out the Russian economy and providing windfalls to Iran.
- China, while a heavy importer, has diversified energy sources and stockpiled oil, suggesting resilience.
- The U.S. handling of the crisis has strained relationships with allies, leading to denied base access and wavering support.