Just this past week, the US and its so-called greatest ally Israel initiated a war against Iran. While the justification for this war has varied, with various US and Israeli leaders giving numerous contradictory explanations, the war continues nevertheless. The US and Israel assassinated the Ayatollah Khomeini, the spiritual and political leader of Iran. Iran retaliated by shutting the Strait of Hormuz.
Iran shuts the Strait of Hormuz
Iran’s geographic position provides it with tremendous leverage over the global economy. 20% of the world’s oil supply transits the Strait of Hormuz, on the southern border of Iran. And this cannot be made up quickly or easily rerouted over land. The Strait is a very narrow, shallow body of water that is easily targeted with land-based weapons systems. Since Iran closed the Strait of Hormuz, vessel insurers dropped coverage for war and several oil producers in the Gulf have, or are planning to, declare force majeure. The US government claims they will insure and use the US Navy to protect vessels transiting the Strait, but that seems to be impossible.
Iran has prepared for this war for years
Iran has been at odds with the US for decades. They have decentralized their command and control, and the military IRGC holds tremendous power in the country. Iran has cheap, effective weapons systems that cost the US millions to try and defeat.
Qatar LNG, others shutting production
Qatar LNG, one of the biggest exporters of liquefied (shipped by tanker) natural gas in the world (they supply 20%), is shutting production and declaring force majeure because their LNG goes through the Strait. It will take weeks to restart production in order to avoid damaging equipment. LNG is the main feedstock for ammonia fertilizer, and it also provides grid power to Europe since the US blew up the Nord Stream pipeline from Russia. LNG is also used in Asia for energy and manufacturing. Other oil-production halts loom in the near future as storage fills up.
Fertilizer transits across the strait
Five key types of crop fertilizer ordinarily transit the Strait: ammonia, urea, sulfur, phosphates, and natural gas. All of these are critical to sustain agricultural yield at current levels. And a substantial amount of world supply of these currently moves through the Strait.
Without fertilizer, food prices to skyrocket, hunger to rise
Our current agricultural system is totally dependent on synthetic fertilizers. Perhaps this is why Trump put his recent EO to not only protect glyphosate but also phosphorus-derived fertilizers.
I’d recommend stocking up on storable food, preferably freeze-dried as that lasts the longest.
You can keep up with the status of the Hormuz closure here.