Full conflict has resumed, and the problem for the West is oil has been further depleted. After the MOU was signed, oil flows recovered to about 25% of flows prior to the war. So, global oil reserves have still been used to keep things moving.
I recently saw a video accurately examining Iran's strikes on countries in the Gulf. The extent of damage is much greater than has been disclosed previously.
This is very serious.
Oh no, reports are coming in that the US may restart strikes against Iran. This would likely result in Iran targeting desalination plants in the Gulf, just as the region enters the summer months. For those who do not know, countries like the United Arab Emirates and Qatar rely on desalinated sea water for their potable water supply. Dubai, Doha etc will be unliveable without fresh water and their buildings also require air-conditioning because their daily highs can reach 50 degrees Celsius (122 Fahrenheit).
Imagine 15 million people from the region moving out and arriving in the West, all within a month. Yeah, that'd be a problem.
Apart from the blockade of the Strait of Hormuz, the next biggest thing to happen as a result of the US-Iran war is the sudden announcement of the United Arab Emirates leaving OPEC.
When the Strait opens up again, and the oil is flowing freely, this move will have two effects; the first being to lower oil prices as the UAE will start pumping oil well beyond its current OPEC quota limits. They'll do this to help pay for damage caused by the war. A consequential effect may then be to challenge the viability of two industries, fracking and electric vehicles. The latter will only happen if the price of oil comes down by a lot, which it can do, but it is a wait and see.
Right now though, with the Strait still closed, we have an immediate supply crisis, that remains unchanged.
Here's an idea, New Zealand should move to mop up all the money that will be fleeing the United Arab Emirates right now. All those seeking the tax-free life, don't like receiving messages on their phone telling them their friendly neighbourhood missile will be arriving shortly.
A few years ago I suggested NZ set up a tax-free zone in the East Cape. Let's do this now. For people from overseas, we could take part of the coast and designate it tax-free so long as they stay resident for 120+ days of the year (or something).
https://kenhorlor.blogspot.com/2017/07/make-east-cape-monaco.html
https://kenhorlor.blogspot.com/2018/06/making-east-cape-monaco.html
Commentators predicting an oil crisis following Iran's closing of the Strait of Hormuz are well wide of the mark. That is because Saudi Aramco has started shipping more oil out of its Red Sea facilities (see link). Furthermore, Egypt is offering its pipeline to move Saudi oil to the Med.
https://www.hellenicshippingnews.com/egypt-offers-sumed-pipeline-to-facilitate-saudi-oil-exports-amid-hormuz-closure/I've also seen predictions that some of the people in the Gulf states will starve. But anyone looking at a map will see that there is a land corridor to these states, and so food can get in to feed stranded tourists. The same land corridor could be used to evacuate people from Dubai, Doha and the like. Buses are starting to look mighty useful.
However, there are some serious issues regarding the viability of the United Arab Emirates long term. Dubai as an airport hub could be lost. Ethiopia has been promoting Addis Ababa as a useful mid-point stopover, and they've commenced building a new international airport there.
Dubai's status as a tax haven sanctuary may be over, too. The rich don't like adding bombs to the risk assessment. It'll also be interesting to see how the large sovereign wealth funds based in the Persian Gulf fare now that their economies are toast. This will massively impact the United Kingdom. Interesting times ahead indeed.
Iran appears to have lost its navy and air force, and this war will end when it runs out of ordnance. I give it another three weeks at this rate. Will China and Russia come to their aid? I doubt it, as Russia has its own issues, plus it'll be selling more oil right now. China tends to be all talk; they've never won a war, and if they enter the fray, they too will lose their entire navy.
South Korea, Japan, South-East Asia and Oceania may experience the rapid onset of an energy crisis, and in Australia and New Zealand, there seems to be little urgency. The latter two really do have useless leaders.
