Why we CAN'T reopen the Strait of Hormuz

[mainer]

And now Red Sea shipping will be shut down as well by the Houthis. We are really screwed.

“Shippers are not going to go back in—particularly large shipping firms—until they both have insurance and until they see the US Navy doing repeated freedom of navigation transits through the Strait,” Michael Knights, a veteran IRGC analyst, told Columbia University’s Center on Global Energy Policy. “The US Navy has to go first. It has to show it’s willing to put its ships in the Strait before anyone will put a tanker or an LNG carrier. The problem is the US Navy isn’t doing that...”

The Navy’s reticence may be because Trump doesn’t want to risk seeing one of his ships blown up by an Iranian ballistic missile that can be fired from deep within the mountainous terrain that borders the Strait. “President Trump has been made to understand by the Navy, I’m sure, that he stands a high chance of seeing a US warship on fire if he moves one into the Strait of Hormuz,” Knights said.

Meanwhile, a second front has opened. The Houthis fired a ballistic missile at Israel on Saturday, signaling that one of Iran’s most powerful allies has entered the conflict. “The decision by the Houthis to join the broader Middle East conflict marks a serious and deeply concerning escalation,” Farea al-Muslimi, a Yemen analyst at Chatham House, told The Financial Times.

The timing could not be worse for global shipping. With the Strait of Hormuz shut, Saudi Arabia has been pumping oil across the desert by pipeline to Red Sea terminals — the only remaining route for Gulf exports to reach world markets. The Houthis control the Bab al-Mandab Strait, the narrow chokepoint at the southern end of the Red Sea. A tanker queue forming in the Red Sea is exactly the kind of target the Houthis spent two years learning how to hit.

https://open.substack.com/pub/theiceman/p/why-the-most-powerful-navy-in-the?utm_campaign=post&utm_medium=email

[gab13by13]

1. The Houthis have been decimated but are still relevant.

Even President Biden bombed the hell out of them. The Houthis have to decide if they want to jump into the war or not.

If they were to shut down the Bab-al-Mandeb strait it would cause much chaos.

This strait links the Red Sea, effectively to the Indian Ocean to the Mediterranean Sea and further to the Atlantic and access to the Suez canal.

$200/barrel crude oil for sure.

[NickB79]

2. Drones are cheap

And Iran has given them more than enough to hammer unarmed tankers.

Drone warfare is revolutionary.

[gab13by13]

3. As I said

if the Houthis jump into the war look for $200/barrel oil.

[NickB79]

4. Not for long, unfortunately

I say unfortunately because $200/barrel would quickly cause a global economic crash and vast demand destruction.

We'll see cheap oil again, but only be able to afford beans and rice.

[gab13by13]

5. Yeah, I keep waiting for an economist to use the D word - deflation.

[LeftInTX]

6. Cuz we don't live there?

Don't have time to read the article...

[mainer]

7. It's worth a read -- and it all gets down to insurance

Insurers won't let tankers go through Hormuz because they fear losing their ships. So the tankers won't proceed. And Trump won't send ships, to avoid the devastating image of a Navy ship on fire.

And to make matters worse, the other route, through the Red Sea is about to be blocked by the Houthis. So no Gulf oil at all, unless you bow to Iran.

We're in a far worse position than most people realize.

[LeftInTX]

8. I read it.

"Cuz we don't live there" was my snarky first reaction.