#world #global_affairs
What would happen when the Strait of Hormuz is opened to the world? Prices of crude oil would go down, and prices of gas, oil, and other related products would go down sharply. The extent would be sharp. And most importantly, people would forget that the USA won over Iran. This is not what Iran wants; Iran wants to tell the world each day that the USA decimated Iran and that Iran still has power. Yes, Iran is showing it is powerful by keeping the keys to the Strait of Hormuz locked with it.
Iran, by the way, by closing the Strait of Hormuz, wants to show it is still powerful. That Iran still has power to stop the world. And it did it.
Sooner or later, the Strait of Hormuz would be open; the prices of crude oil would drop sharply after that. But why? There are so many filled tankers in Hormuz, ready for delivery. It would be fast then.
There would be a cascading effect on other products across various streams. Not just gasoline, diesel, petrol, LNG, fertilizers, and petrochemicals, but other products too would take the effect into consideration. Not just products, but so many forms of services increased in price during the Hormuz closure.
This means even the services and labor fees that increased during the Hormuz closure and hike period would decrease. For example, truck drivers asked higher charges for the same delivery work during this period. This happened as oil prices increased. Would truck drivers revert to old charges? It’s difficult to say, as they didn’t have much salary revision before Hormuz happened. Yes, truck drivers, fertilizers, and gas increased charges raised the rates for grocery, vegetables, and even milk. So would milk be sold at old prices then after Hormuz is opened? Would businesses return to old prices? No as we can’t trust Iran.
Who is to pay for the higher charges? We are paying higher for milk. Should Iran pay? Who else?
Crude oil is around 110$ a barrel; it can come down to 70$ within the time of the opening of Hormuz. But the complex geopolitical situation makes it complex, as prices can rise again, as Iran is notorious for striking US targets again. A ceasefire can be put in place, but no one can predict Iran’s action, given Iran wants to show it still has huge strength that even the USA is afraid to go to Hormuz to help vessels of oil come out of it.
How long would all this last? What does that mean?
Well, it all depends on Iran.
Iran is taking things for granted.
First, it declared victory over the war, without signing any agreement.
Then it went on and off attacking USA stations in the Middle East with USA allies. But why? Ask Iran why it is doing this? That too when a temporary ceasefire is ongoing.
Latest: Iran shot down a US helicopter. Why? If it wants peace?
So, one more thing: it is not the USA; it is Iran that has closed the Hormuz Strait.
The USA wants the Hormuz to remain open at all times, indeed as soon as possible. In fact, the USA tried this several times.
So all these price rises Iran should pay to the world.
Iran, in exchange for agreeing to open the Strait of Hormuz, wants access to its frozen assets. Well, Iran pay the world the rise in milk and grocery prices.
Even people in Iran are living with hyperinflation, so what to say then. But why are all people of the world paying extra charges just because Iran is adamant?
Thanks for reading.
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