Iran could make the US economy SCREAM if the Hormuz Strait were shut down in response to Israeli aggression.
Crude prices jumped by double digits in the wake of Israel’s massive surprise attack on Iran, but that’s nothing compared to the oil shock that would hit Western economies if the strait accounting for a quarter of the world’s oil needs were closed.
In a note published Thursday on the eve of Israel’s attack, JPMorgan warned oil prices could nearly double to $130 a barrel if the 21 million barrels in crude flowing through the Hormuz Strait dried up.
“That would spell trouble for consumers—American ones, in particular,” FT says, pointing out that low oil prices are the only thing propping up the US economy against a new inflationary surge.
Not to mention the fact that Trump has made cheap energy a key plank of his economic platform. If tensions lead to the Strait’s closure, the US would slip into a full-blown recession, and Trump’s dreams of an industrial renaissance would collapse like a house of cards.
Global stocks fell sharply Friday in response to events, with gold, a traditional hedge in times of crisis, on its way to topping its all-time high record of $3,500 per ounce.
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