Twenty million barrels of oil passed through the Strait of Hormuz yesterday. Today the number may be zero.

[womanofthehills]

War risk underwriters began canceling policies for strait transits hours after Operation Epic Fury launched. The Financial Times confirmed premiums surging 50 percent. Baseline war risk sits at 0.25 percent of hull value. For a hundred million dollar tanker that is 250,000 dollars per voyage. At peak escalation rates, one million per transit. Vessels linked to American or Israeli interests are becoming uninsurable entirely. No price. No policy. No passage.

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[pat_k]

1. Of course! Seems an obvious consequence once it's brought to your attention.

Wanna bet it's a big surprise to the felon and his minions?

[niyad]

4. Pretty sure they are counting on it, to raise prices and make his oil buddies

even more money.

[Melon]

2. Much less of an issue for the US. We produce currently just under 14 million barrels a day

On 20 million consumption. 4 million comes down from Canada plus now Venezuela. Bigger issue for China.
There has always been a risk premium to oil because of Iran. This will cause a premium, but not much yet. Brent is at $72 a barrel with the rise in price only $2 today so far which is nothing. In the last 5 days it’s up 2.5%. This is not driving prices yet.

[angrychair]

3. Point is, it will

Of much more concern is how China will react to have their oil put at risk.

He is trying to push China's buttons. That is not a fight we want at all.

[niyad]

5. You are quite correct.

[BumRushDaShow]

9. China is just observing and taking notes for their plans on Taiwan

So I wouldn't worry about them at this point. The issue is going to be Russia because their oil is sanctioned, they are allied with Iran as most of their drones have been manufactured by Iran, and if they go full-Iran support, they will really let loose on Ukraine as "punishment".

[Another Jackalope]

6. The last two lines of that post:

"Iran figured out something the Pentagon still has not.
You do not need to close a strait. You just need to make it uninsurable."

[Aussie105]

7. How much does the rest of the world depend on oil exports from Iran?

There will be possible fuel shortages and big price jumps for consumers of the oil products.

So much for people who think this conflict won't affect them directly.

https://www.independent.co.uk/news/world/middle-east/iran-fuel-petrol-oil-prices-cost-israel-strikes-b2929649.html

[roamer65]

8. Al Jazeera just reported a tanker was attacked.

That will end insurance of tankers which pass through the strait.