The Houthis of Yemen have announced a blockade of the Bab al-Mandab Strait, principally targeting Saudi Arabia. This will have a major effect on the world economy as currently Saudi Arabia has diverted its oil exports to its ports on the Red Sea, away from transiting the Strait of Hormuz, which is also blocked.
With this move, we can say that the US-Iran war has now gone regional. Yemen's Houthis are backed by Iran.
The 'deal' between the US and Iran hands Iran a huge win. Key in all this is the next 60 days. Over that time, while the final deal is being drafted, global oil reserves will be run down more and yet only a trickle of oil will leave the Persian Gulf. Moreover, oil that does get out will take time to process when it arrives at refineries. Iran can simply shut down the Strait of Hormuz again and completely crush its enemies.
Is oil moving? No. The politicians do not seem to realise that in situations such as this, where there is a complete lack of something, markets don't really work. Nothing is still nothing.
Look at it like this; if you're dying of thirst in the desert, what the futures market is saying about what a glass of water is worth will do nothing of real value, you will still die of thirst as you have no water.
This is a must watch. The world will experience a global famine if the Strait of Hormuz isn't opened up.
Good news, Iran has opened the Strait of Hormuz so long as the ceasefire in Lebanon holds. Ships must still go through their tollgate though, which limits the speed with which ships can exit the Gulf. I checked on Marine Traffic's website and there isn't a flood of vessels underway, but expect this number to increase significantly.
Now, Australia and NZ governments, don't sit back and claim credit for everything while doing precisely nothing. Now is the window of opportunity to come up with distillation solutions for your own oil. How long do you need just sitting around on your hands, you clowns!
Here's what to do: https://kenhorlor.blogspot.com/2026/03/new-zealand-fuel-crisis-action-required.html
A bit of simple arithmetic is needed to explain why the closing of the Strait of Hormuz could destroy the economies of Australia and New Zealand.
Both countries rely on imported refined product from Asia. New Zealand is wholly dependent while Australia is about 90% dependent. China has ceased exporting product, so cross them off the list. That leaves, for the most part; South Korea, Singapore and Malaysia as suppliers.
South Korea processes up to 3.4m bpd (million barrels per day), 2.5m of which is consumed domestically. 70% of their supply comes from the Middle East.
Singapore processes about 1.5m bpd, and they import 70% of their oil from the Middle East.
Malaysia processes about 900,000 bpb, and they import about 40% of that oil from the Middle East as they have their own oil wells. Domestically, they consume about 77% of the total and export the rest.
I trust you may begin to see the problem. With a huge amount of Middle Eastern oil coming through the Strait, but now shut off, these Asian economies will need to prioritise their own market first, and even then they'll come up short.
South Korea has begun buying oil from Canada, about 800,000 barrels per day. That's well short of the 2.4m bpd needed. They can only just supply themselves, leaving nothing to export.
Singapore looks set to lose 1.0m bpd, and that equates to the daily consumption of Australia. Forget NZ, they'll just be left to fail.
Malaysia, just to supply its own needs, will have to import from other sources, just as South Korea is doing.
All of this adds up to a very serious predicament Downunder. I see the Philippines has declared a state of emergency, and that is a wise thing to do. Australia and New Zealand need to follow suit as this war in the Middle East could drag on for a long time, that much is obvious.
Another link - what to do NOW https://kenhorlor.blogspot.com/2026/03/new-zealand-fuel-crisis-action-required.html
The Strait of Hormuz will remain closed until all of Iran's demands are met. Iran is calling the shots, and no-one can challenge them.
Study the map to find out where and when fuel gets to critical levels in each region. Each area circled shows where fuel supply starts to become critical. The east coast of Africa is first, they're already feeling it. Then the Far East from the 1st of April. Europe follows on April 10th, and the US April 15th. Lastly, Australia and NZ feel the pinch from April 20th.
Why haven't governments hit the panic button yet? The reason: they're living in a false spring, either hoping supplies will resume, or refusing to see the bigger picture. What consumers are putting in their vehicles now are refined fuels from crude shipped back from before the war started. As those stocks from earlier gradually run out, the pinch will be felt, and fast.
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| JP Morgan Map of Critical Oil Supplies |
Diesel could soon run out, and if that happens, food shortages will become very real. Australia is openly talking about it, and New Zealand must wake up.
The governments of Australia and New Zealand are inept, we need to get started with securing diesel supplies NOW.
If reports are to believed, big IF, then Iran is now one of the big four, and the big three of US, China and Russia have a new member. Iran has defeated the United States.
For a ceasefire to be called, Iran had ten key demands, and Donald Trump announced he's accepted all of them. This leaves Iran in complete control of the Strait of Hormuz, the Persian Gulf is now its lake.
The US defeat in Afghanistan was the biggest defeat of a western country in history, ancient or modern. Now, this surpasses that. But then, the ceasefire may end within 24 hours, who knows? One thing is for certain, countries are going to find it hard still as the oil isn't flowing yet, and it may take a year or two for flows to resume even if the will exists to make it so.
Update: thinking about this some more, this appears to be Iran's Battle of Britain moment. I'll explain, the BoB was a defensive action, with Britain's goal of avoiding outright defeat. The way the Germans saw it, they were simply trying to knock Britain out, then when they'd done that they turned around to deal with the bigger threat, Russia (then known as the USSR). Thus, Britain claims victory as they were still standing when the attacker quit. Germany, however, say they did not lose, they just changed priorities.
The reality was that Germany was losing aircraft at a rate where they could not replace them. Most losses were on the ground in takeoff and landing, in fact, not fighting in the air. If Germany had continued, they'd have simply run out of planes, while Britain's industry could replace theirs. The Germans badly underestimated the industrial output of the British Midlands.
This appears to be a similar situation in the Gulf. The US lost 11 or so aircraft just rescuing one downed airman, and their bases have all been destroyed in the region. Their carrier strike group has had to retreat well into the Arabian Sea, well away from cruise missiles. Scuttlebutt says that Trump did launch an attack on Iran, in line with his ultimatum, but that every Tomahawk cruise missile was taken out by Iran. He buckled after that, and I'm speculating he was told that the US was fast depleting its ordnance and that it couldn't be easily replaced.
Israel has announced they do not consider their offensive in Lebanon as being covered by the ceasefire, and the Gulf states will be unhappy ending up effectively satraps of the new Iranian empire. Therefore, this ceasefire is unlikely to last any more than a few hours or days - we'll see.
And think, we have a Soccer World Cup coming up, that will be interesting.
The amount of oil and gas being carried through the Strait of Hormuz has plummeted, from an average of over a hundred tankers daily during February, down to an average of six tankers daily in March. However, there is a trend of some tankers running the strait by sticking close to the Omani shore, while others are paying the toll to Iran and going through the toll gate they've set up between Larak Island and Qeshm Island (not a literal toll gate, but a passage through which ships must travel).
Russian oil is back in the mix, too, and Southeast Asian refineries appear to be using this oil as additional feedstock.
What may happen is that the world gets to a point where the price of fuel is simply high all the time, with a new normal being that Iran has control of a huge chunk of global supply.
Countries like Australia and New Zealand will have to suck this up, for now, but then move swiftly to self-sufficiency, as they both have the resources. They both lack the ability to process these resources, and so they must move to fully industrialise.
I watched it live, but I have to confess I'm none the wiser. President Trump said what he'd already posted on social media, and left a lot up in the air. What, exactly, was that all about?
Oh no, going in on the ground in Iran? Iran is mountainous and contains 90 million people. This won't end well. And Afghanistan will be itching to get involved.
Iran has clearly prepared for this and are setting about blocking the Strait of Hormuz. They're being successful at it, and are now attacking tankers and oil transfer facilities in the region.
For Australia and New Zealand, this is becoming an existential crisis. Already, farms in remote rural locations in Australia are finding they cannot obtain diesel. Hardware stores have sold out of jerry cans as people stock up.
New Zealand is steadfastly blundering onward, their heads firmly in the sand. The country's leaders are woefully incompetent, it's like leaving a bunch of ten year-olds in charge. Here are some things to think about, diesel is essential to the nation, thus:
As a result of the disruption to LNG shipments from the Persian Gulf, Asia, in particular, is moving to energy security through coal.
Coal is the giant on the block, and always has been.
https://tradingeconomics.com/commodity/coal/news/531727
Coal prices climbed above $140 per ton, hitting their highest levels since November 2024 as the escalating conflict in the Middle East and resulting disruptions significantly heightened global energy supply risks.
Oil also surged above $100 for the first time since 2022 after major Middle Eastern producers curtailed output as the Strait of Hormuz remains effectively shut.
In addition, the shutdown of Qatar’s massive liquefied natural gas production has boosted demand for fuel switching in the power sector.
New Zealand and Australia rely on fertiliser coming out of the Persian Gulf through the Strait of Hormuz. If the conflict goes on much longer, their respective economies will be severely impacted.
Here's a rational explanation as to why the closing of the Strait of Hormuz is NOT an apocalyptic crisis. Although I'd add that some regions will be far more seriously impacted than others. The Far East, South-east Asia and Oceania being top of that list. China has stopped exporting fuels, which further restricts supply to the region.
Something I overlooked is that fuel oil supplies for ships are being affected by the war in the Persian Gulf. The Middle East is a major supplier of the fuel oil required for ships, and Singapore is a major refueling point which imports its fuel oil from the Middle East. Fuel oil prices have therefore surged 30-40%, and supplies will run out toward the end of March.
The cost of goods will rise worldwide as shipping costs adjust upward, and some countries that rely on exports for their income may simply be unable to ship to their customers. Likewise, energy imports will be choked off.
Australia and New Zealand are two countries impacted, and the rest of the Far East as well.
The price of fuel oil has surged this week as the stalled tanker traffic at the Strait of Hormuz is tightening supplies of the fuel in Asia, the key bunkering hub for fuel oil used in ships.
The Middle East is a major global supplier of fuel oil, especially of high-sulfur fuel oil (HSFO). But the Iran war has all but halted traffic via the Strait of Hormuz, stranding supplies for Asia and its key bunkering hub of Singapore.
As a result, prices have soared and are set to continue rising, traders and analysts told Reuters on Friday.
