Some foreign holders of U.S. Treasury securities are selling them to buy oil, which is denominated in DOLLARS, not in yuan

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DXY: 99.893 

Foreign central banks sell US Treasuries in wake of Iran war

 

Peter Morici doesn't get it that Tehran already threatens the global order, without nuclear weapons, because it already decides who may safely pass through the Strait of Hormuz

 

 ... With nuclear weapons in hand, Iran could threaten the global order with impunity. ... Tehran would recover, build atomic weapons, decide who may pass safely through the Strait of Hormuz, and slowly strangle the global economy by demanding tribute for access to precious Gulf oil and LNG.

Very odd essay.

Here. 

The U.S. has military bases in all Persian Gulf countries except Iran, from which Trump has launched attacks on Iran which will have the effect of bankrupting those countries

 There is something deeply insane about all this.

Only Saudi Arabia and the UAE have pipelines which can by-pass the Strait of Hormuz and replace a part of the lost export capacity. Production will have to be curtailed because there's nowhere to go with it. And everyone in the world will be poorer for it.

 

 

Massive oil shortages incoming, tanker traffic down 90% in March through the Strait of Hormuz

 

In other words, this would mean Trump is going to cut and run from the Persian Gulf just like he cut and ran from the Red Sea on May 6, 2025

 Trump Tells Aides He’s Willing to End War Without Reopening Hormuz: Administration officials assess that forcing the waterway back open would mean extending the military mission

WASHINGTON—President Trump told aides he’s willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed, administration officials said, likely extending Tehran’s firm grip on the waterway and leaving a complex operation to reopen it for a later date.

In recent days, Trump and his aides assessed that a mission to pry open the chokepoint would push the conflict beyond his timeline of four to six weeks. He decided that the U.S. should achieve its main goals of hobbling Iran’s navy and its missile stocks and wind down current hostilities while pressuring Tehran diplomatically to resume the free flow of trade. If that fails, Washington would press allies in Europe and the Gulf to take the lead on reopening the strait, the officials said. ...

 

It's embarrassing to have a whiny little baby for president demonstrating everyday that he's not up to the job of being the leader of the free world

 Trump lashes out at UK and France, telling allies ‘the U.S.A. won’t be there to help you anymore’

... “You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us. Iran has been, essentially, decimated. The hard part is done. Go get your own oil!,” he concluded. ... For its part, Tehran continues to demonstrate its ability to dominate and derail maritime traffic in the strait, hitting a fully laden Kuwaiti oil tanker in the anchorage area of Dubai’s port earlier Tuesday. 

Trump says "we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!)"

 Trump says U.S. will destroy Iran’s oil wells, Kharg Island without deal to ‘immediately’ reopen Hormuz Strait

He thinks this is a bargaining chip instead of a requirement.

Fed chair Jerome Powell didn't say the oil shock will be transitory, but he might as well have

 

 ... Powell said raising rates now could have negative effects on the economy later. He noted that Fed rate moves have a lagged impact on the economy, so tightening here wouldn’t help the inflationary impact of the Iran war.

“By the time the effects of a tightening in monetary policy take effect, the oil price shock is probably long gone, and you’re weighing on the economy at a time when it’s not appropriate. So the tendency is to look through any kind of a supply shock,” he added. ...

More.

Mistaken yet again.

We have permanently higher prices across the board as a result of the COVID shock. 

Strategic victory for Iran (and China): Iranian control of the Strait of Hormuz is the primary result of the U.S.-Israeli war on Iran so far

... So far in March, the first full month of war, barely six vessels per day on average have traversed the narrow waterway connecting the Persian Gulf to the world, in either direction. That compares with about 135 a day in normal times, according to ship-tracking data compiled by Bloomberg.

Over that time, 80% of the small number of oil tankers exiting the strait have been Iranian — or belong to countries with which it is on cordial terms, the figures show. ...

Out of the 110 individual ships that left the gulf this month, more than 36% were sanctioned Iranian ships or part of the so-called dark fleet serving Tehran, data compiled by Bloomberg show. For oil tankers, 21 out of 35 that have exited had direct Iranian ties — but most of the remainder went to nations with whom Tehran has a friendly relationship. 

Until this war, one long-held assumption around Hormuz was that Iran would never attempt to close the strait, for fear of risking its own exports, a vital economic lifeline. In fact, ship-tracking data suggest that Tehran’s oil has continued to flow — almost entirely to China — even as other ships are stranded and producers in the region have been left scrambling for alternatives or forced to stop producing as storage fills up.

Iran exported roughly 1.8 million barrels a day this month, a nearly 8% increase from its average over 2025, according to figures from data intelligence firm Kpler as of March 26. That likely facilitated hundreds of millions of dollars of oil revenue for Tehran, a Bloomberg News analysis shows. ...

More. 

If the world had any brains it would skip the Semite wars in the Middle East over oil and switch back to coal while transitioning to nuclear and renewables

Known coal reserves are all over the place and can power the world three times longer than known oil reserves at current consumption rates.

 

South Korea, Japan, China, and India can more easily switch right now to coal from the LNG lost due to the Iran war, Taiwan, Pakistan, Bangladesh, Vietnam, and the Philippines not so much.

 

This Is What Happens When the Gas Runs Out...

  

... India is another major importer of Middle Eastern L.N.G. that is likely to pivot significantly to coal, according to Wood Mackenzie. It has vast domestic reserves, and since the outbreak of the war, New Delhi has issued directives to maximize coal-fired output, ordering coal plants to operate at full capacity for three months starting in April. 

 

China likewise possesses huge domestic coal reserves, which, alongside gas piped in from Russia and a world-leading wind and solar fleet tied to the world’s largest energy storage network, have shielded the country from the worst of the L.N.G. supply shocks. ...

 

 

The latest UKMTO JMIC Advisory on 3/29 indicates 12 tankers transited the Strait of Hormuz in the last 7 days vs. 2 previously, 78 through the Bab al-Mandab Strait vs. 130 previously

 Persian Gulf Activity: 1.7/day last week vs. 0.3/day prior week

Red Sea Activity: 11.1/day last week vs. 18.6/day prior week 

JMIC Advisory Mar 29

JMIC Advisory Mar 22

Tanker traffic out of the Persian Gulf has been cut by 98% in one month because of the Iran War, effectively reducing the world's primary energy inputs through the Strait of Hormuz by 20%

The UAE is bypassing the Strait of Hormuz with 1.9 million barrels per day now coming out of Fujairah via its overland pipeline, and Saudi Arabia's overland pipeline west to Yanbu is moving about 4.5 million barrels per day out through the Red Sea, but that's not the 20 million barrels per day lost due to the war, and no LNG is moving at all.

Pakistan and Bangladesh get two thirds of their LNG from the Gulf, Taiwan gets one third of its LNG. Taiwan says its has eleven days' supply remaining. Many others are also severely affected by the cut-off of LNG from Qatar. About 20 LNG tankers are trapped in the Gulf, half the global fleet available for charter.

Meanwhile Iran has increased export of its oil from 1 million barrels per day in February to 2 million in March, 90% of which goes to China, and Iran is now charging tolls to vessels to exit the Gulf along its coast, which occurs only under Iranian escort. 

 

 

If JP Morgan analysts are correct, April will be a month of rolling oil delivery stops from the Persian Gulf starting in E/SE Asia and East Africa April 1, Europe April 10, North America April 15, and Australia April 20

 

The Houthis have joined Iran by restarting hostilities against Israel

Trump couldn't finish the Houthis off last year, and now they come back to bite.

Oil tankers filling at Saudi Arabia's Yanbu port in the Red Sea because it was too dangerous in the Persian Gulf may soon have nowhere to fill.

All because Donald Trump has been mistaken twice in the Middle East.

The energy crisis will soon be a global energy catastrophe, leading to an inflation catastrophe, leading to an economic catastrophe. And maybe a world war.

 

 

Global oil in storage was 8,210 million barrels to start 2026 with consumption at 105 mbpd, meaning a 78-day cushion, analyst says we're moving from absorption phase which began Feb 28 to fragility now

 Brent oil tops $110 again after Chinese ships are turned away from Strait of Hormuz

... “The oil market did not underreact to the disruption in the Strait of Hormuz; it absorbed it,” said Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy.

“For nearly four weeks, markets have shown remarkable resilience … supported by a combination of pre-war surplus, crude-on-water, and policy barrels that provided a temporary buffer and kept prices contained. That phase is now ending,” she said.

According to Rystad, the global system has shifted from “buffered to fragile” after weeks of supply losses and inventory drawdowns, leaving little room to absorb further shocks.

Nearly 17.8 million barrels per day of oil and fuel flows through the Strait of Hormuz have been disrupted, the firm estimated, with close to 500 million barrels of total liquids lost so far.

 

One man ruins the world, except for Russia

 

Trump outmanuevered: Iran decision to let vessels from non-hostile nations through the Strait of Hormuz will make any U.S. military action interfering with that to blame for disruptions

 Oil prices fall as Iran signals safe passage for ‘non-hostile’ ships through Strait of Hormuz

... Iran’s mission to the United Nations said Tuesday that “non-hostile vessels” would be able to pass through the strategically vital Strait of Hormuz, provided they coordinate “with the competent Iranian authorities.”

The social media post appears to establish a protocol that has emerged in recent days, with some ships from China, India and Pakistan able to pass through the waterway as Iran flexes control over it. ...

Trump threatened to bomb Iranian power infrastructure if the Strait of Hormuz wasn't open by last night, and the latest UKMTO JMIC Advisory Note indicates that it is not open

 Normal transits are about 138/day vs. four on March 22 and six on March 23.

 

The Iranian parliament Speaker says Trump is lying, uttering fake news, there have been no negotiations lol

Volume in stock and oil futures surged minutes before Trump’s Iran post

Iran Media Denies Direct Talks After US Holds Off Energy Strikes...

 

  

Leon Panetta: Trump has no choice but to go big or go home

 ... He advises Trump to abandon his magical thinking and “face the fact” that he must use the military to open the strait, neutralise Iranian defences along the coast and deploy ships to escort oil tankers through.

“There’s no question there’s going to be lives lost and it’s clearly going to expand the war but I don’t see the alternative. He’s got to do it. He’s talked a great deal about the strength of the United States. This is a test of whether the United States can be able to deal with that situation which otherwise is not only going to prolong the war but create a lot of economic damage to the United States with those soaring fuel prices and cause what some have said is a potential worldwide recession.”

Panetta added frankly: “There’s not much choice. You’ve got to do what you have to do and, if you can open the strait, it might give you a better chance to then have a basis on which you can negotiate hopefully some kind of ceasefire. That’s the only way that he can go at this point; otherwise he will clearly have failed to find a solution.” ...

More.

He's right.