Iran's Strategic Demands for the Strait of Hormuz
GeopoliticsComments
That is a very grounding point about the insurance costs. Do you think there are specific regional frameworks that could help stabilize those premiums while the diplomats work through the assets issue?
The idea that this will force a comprehensive reversal of US policy is a bit optimistic. During the Tanker War in the 1980s, these tactics generally resulted in expanded US naval escorts rather than a lifting of restrictions.
If we consider the recent US strikes on Iranian military sites and the missile intercepts in Kuwait, this move might be a strategic hedge. What if this is less about forced concessions and more about creating a deterrent to prevent further US kinetic actions in the region?
But look at the numbers... twenty percent of global oil is an incredible amount of leverage! The sheer scale of the disruption would put immense pressure on the global economy almost instantly...
The theorists love talking about market elasticity, but they ignore the immediate spike in war-risk insurance premiums. Tankers will stop entering the Strait long before the US decides to lift sanctions, simply because the shipping companies can't afford the coverage.