Economic effect if Iran Blocks the Strait of Hormuz

[Crabtownboy]

Informative information:

Economic Ramifications

A blockade in the strait means a halt to 17 million barrels of oil passing through it. Thus, twenty percent of world's oil would stagnate, which would, in turn, send northward the already high oil prices.
In case of supply disruptions, oil price could increase by $20 to $30 a barrel, the International Monetary Fund has said. A cut in Iranian exports could be exacerbated by below average oil stocks in many countries, the IMF warns. It has to be noted that similar disruption in Libya, not long ago, pushed the oil prices well over $100 a barrel.
Some analysts estimate the price rise to be over 300 per cent. Apocryphal, maybe. But then, even with half the estimated price rise, the economies which are slowly recovering (the latest US jobs report show positive signs with 243,000 jobs added in January, with unemployment figures at 8.3%, the lowest in three years) would be hurled back to panic mode. (Even otherwise, if you notice, any news from Iran sends the oil investors to a hyper overactive mode. That is, in spite of ground realities).
According to IEA, Iranian oil 'accounts' for 9 per cent of India's oil consumption, and 6 per cent of China's. Together, these countries suck in almost 34 percent of Iran's oil exports. Of the 2.5 million barrels of oil exported by Iran about 500,000 barrels are exported to Europe, while the rest are imported by China, India, South Korea and Japan. Even if these countries move away from Iran's oil, as US hopes, the demand would easily outstrip the supply.
As per US calculation, Saudi Arabia could step-in and increase production to offset any demand short falls from Iran. Already, our research shows that Saudi Arabia exaggerates its oil reserve estimates. In addition, as oil-price.net has always maintained, Saudi Arabia (or for that matter OPEC) doesn't have enough oil to shore up the shortfall.
http://oil-price.net/en/articles/iran-oil-strait-or-hormuz.php

 

[NiteShift]

Which is why US, UK and French ships are making sure the Strait stays open.

 

[marke]

Informative information:

This whole thing is extremely likely to get real ugly real soon. I've been watching the players for a long time now and I see a situation developing which is in complete agreement with Bible prophecy, although the one scenario I am leaning toward is certainly not guaranteed to be right by any means.

Israel will likely attack Iran in the coming months, because Iran has openly declared that it intends to bomb Israel out of existence in less than 10 minutes of bombing, and it is getting close to finishing nuclear bomb-making ability. Russia has its eyes on the middle east oil for itself and has said that it will intervene against the US if the US gets involved, which will almost certainly happen.

If Russia declares war against the US, it will likely be the US which will be bombed to smithereens in just 10 minutes, leaving Russia with the upper hand to move against all middle eastern nations and take over the oil fields for themselves. The Bible says, unfortunately for the Big Bear, that the nation of the North will be slaughtered on the hills of Israel in the beginning of the tribulation period.

America, in this scenario, will be the "Great Babylon" of Rev. 18, completely destroyed in one hour.

 

[billwald]

Fighting to keep the sea lanes open would be the first "constitutional" and moral US war since WW2.

 

[InTheLight]

Gingrich answered the call in the debate last Tuesday night.

GINGRICH: Well, the first thing I'd do, across the board for the entire region, is create a very dramatic American energy policy of opening up federal lands and opening up offshore drilling, replacing the EPA.

(APPLAUSE)

The Iranians have been practicing closing the Straits of Hormuz, which has one out of every five barrels of oil in the world going through it. We have enough energy in the United States that we would be the largest producer of oil in the world by the end of this decade. We would be capable of saying to the Middle East, "We frankly don't care what you do. The Chinese have a big problem because you ain't going to have any oil."

 

[marke]

Gingrich answered the call in the debate last Tuesday night.

GINGRICH: Well, the first thing I'd do, across the board for the entire region, is create a very dramatic American energy policy of opening up federal lands and opening up offshore drilling, replacing the EPA.

(APPLAUSE)

The Iranians have been practicing closing the Straits of Hormuz, which has one out of every five barrels of oil in the world going through it. We have enough energy in the United States that we would be the largest producer of oil in the world by the end of this decade. We would be capable of saying to the Middle East, "We frankly don't care what you do. The Chinese have a big problem because you ain't going to have any oil."

I agree. Good point.

 

[Squidward]

Their navy consists of a yacht and five john boats. They ain't blocking anything, but I agree, we need to become independent.

 

[InTheLight]

Their navy consists of a yacht and five john boats. They ain't blocking anything, but I agree, we need to become independent.

That's incorrect. They have a large navy, though comprised of smaller boats, that could be a real problem if they did gang attacks from multiple angles within the relatively narrow Straits of Hormuz.

 

[Squidward]

From what I've heard, yes, they could do some damage, but when our Navy is ready for confrontation, this conflict would be one-sided and over very quick.

 

[billwald]

All they have to do is sink a couple of tankers crosswise in the straits.

 

[NiteShift]

They have a large navy, though comprised of smaller boats, that could be a real problem if they did gang attacks from multiple angles within the relatively narrow Straits of Hormuz.

Iran also has at least 3 submarines and a variety of anti-ship missiles.