Iran and Ukraine Make Oil Shocks Look Too Easy
Should this ship stay or should it go through the Strait of Hormuz?
Photographer: Shadi J. H. Alassar/Anadolu via Getty Images
It is kind of surprising that oil shocks are shocking. A vital commodity coursing through the capillaries of modern life that is also, via a cosmic joke, reliant on some of the most volatile places on Earth. Why wouldn’t there be disruptions? Yet, history shows we get blindsided again and again.
The current disturbance, now suspended in a murky two-week ceasefire, is different in terms of scale. The supply choked off in the Strait of Hormuz equates to 10% to 15% of global demand, significantly higher than the 7% hit during the Arab oil embargo of 1973-74. But it is also different, momentous even, in one other respect that also links it to another, somewhat overshadowed, oil shock erupting thousands of miles further north around St. Petersburg.