The Strait of Hormuz Crisis Shows the World Still Runs on Fossil Fuels
The Strait of Hormuz is barely 21 miles wide at its narrowest point. Yet this narrow maritime corridor carries one of the greatest concentrations of economic risk on the planet. When tensions flare in the Persian Gulf, the reverberations travel far beyond the Middle East. They are felt in Mumbai, Tokyo, Seoul, Bangkok and Manila — and ultimately across the entire global economy.
The reason is simple. Roughly one fifth of the world’s oil consumption and a similar share of global LNG trade passes through the Strait of Hormuz, making it the most critical energy marine chokepoint on Earth.
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No Fossil Fuels No Civilisation
I fear Tilak is too engrossed in his energy perspective to understand the geopolitics of what is really going on. Trump has just lured the Europeans in into blurting out, literally in the case of Germany, that “This is not our war”, despite their huge dependence on oil and gas from the Strait of Hormuz. He now has the easy exit from Ukraine he has been looking for, maybe as well for the huge numbers of US military forces based throughout Europe and the Middle East.
The war in Iran is a war against the “rules-based order” dominated by the UK deep state and the City of London (that closed the Strait by suspending gulf shipping insurance) which Trump has publicly rejected through his new National Security Strategy. He is looking to establish friendly relations with Russia and China rather than the forever warmongering stoked by the deep state for its own ulterior motives. He is talking of creating a new Core 5 group (USA, China, Russia, India and Japan) which excludes Europe entirely.
Iran is not “our war” but Russia/Ukraine is. Why?
Ukraine is “our” war only because it’s the war of the deep state which Biden and all the Democrat presidents as far back as Clinton supported but Trump doesn’t. They engineered the 2014 coup in Ukraine, they encouraged the civil war against the ethnic Russians in the Donbas which killed thousands of civilians and finally provoked Putin beyond his limit by stating that they would allow Ukraine to join Nato, analogous to allowing Cuba to house Russian ballistic missiles. Yet the deep state-compliant MSM and politicians always insist that Russia’s invasion was unprovoked.
The remnant deep state (UK and Europe) has always been desperate for a proxy war with Russia in order to weaken and even break up Russia. It had to be a proxy war supported by the USA because Europe is a military pigmy against Russia. They have now been left in an impossible lurch by Trump.
The danger is that these lunatics will escalate action against Russia, as the UK did the other day by sending Storm Shadow missiles deep into Russia, which drags the USA in against its will. Trump even enunciated this fear during a press conference the other day.
They are only there because Stalin banished most of the Ukrainians in the Donbas to Siberia and then resettled Russians in their empty homes. It was called the Holodomor.
Just a quick point 👉, why are there no European countries mentioned in those lists?
If they are not among the major uses of Hormuz oil, then why have our prices at the pumps shot up immediately?
Surely this would be hurting the far East way more than us?
Northern Ireland for example with its reliance on oil fired central heating. And where they are still installing natural gas infrastructure in spite of Milliband’s pronouncements.
Because the oil companies are in business, and they know their customers are woefully uninformed and will just bleat, “It’s all Trump’s fault! It’s all Trump’s fault!”
They are right. I just had an email from a colleague who is highly educated and intelligent, telling me his pension fund is doing well in spite of attempts by Liz Truss and Donald Trump to destroy the world economy. Moron.
Supply and demand direct prices in anything.
Oil companies only extract oil and gas, they do not determine selling prices, just as farmers only grow food and do not determine selling prices in the shops.
It is market traders who buy and sell oil who determine oil prices by bidding to get supplies to meet global demand.
Gas is a bit different because a lot of gas is piped direct from extraction point to Country of destination so bypasses the international market, then there is LNG which is point to point, although any scarcity affects new contract prices.
(This is why Mad Ed Minibrain’s claims that international gas market prices affect electricity prices is a lie. )
Number of reasons: Supply/demand/price. When supply is threatened, for sure panic buying will follow. Price is a rationing mechanism to dampen demand until supply can be recovered. This avoids fuel supplies being exhausted and hoarding.
And. Retailers know they will have to pay more for next delivery, so increase their prices so they have the money to pay. This is why pump prices go up immediately. Then when oil prices come down, pump prices do not drop because the petrol in the tanks under the forecourt was bought at the higher price, and perhaps the retailer has resupply on-order under contract at the higher price.
Oil is internationally traded. Middle East is not the only source of oil. When supply from the ME is interrupted, traders will seek supply from elsewhere and this will lead to increased prices as traders bid against each other.
You may notice second to last least user of Hormuz oil is Europe! and of Europe, Britain doesn’t even get a mention!
“They are felt in Mumbai, Tokyo, Seoul, Bangkok and Manila”. Yes and here in Antrim, Northern Ireland also, where the price of heating oil, which a huge proportion of the non city dwelling population use for heating has doubled since the start of the month.
I know France is not entirely unaffected by this (the price of diesel and petrol on the forecourts has jumped, obviously), but…. NUCLEAR.
Yes, the adults are still broadly in charge of the energy infrastructure here.
Electricity is only about 15% of energy consumption. Rural France relies heavily on heating oil and LPG, and France imports LNG for its gas grid. So France will be just as affected as other European Countries.
Note: UK still gets 40% of its gas from the North Sea, so will be less affected.
Nuclear accounts for a lot more than 15% of France’s total energy. How did you get 15%?
i think total energy is meant, not total electricity which is what you have thought you read?…
No, I mean total energy. Nuclear power is used to generate electricity, but as a proportion of ALL energy usage in France, that generated by nuclear accounts for 44%.
https://www.iea.org/countries/france/energy-mix#where-does-france-get-its-energy
There is no such thing as a FOSSIL FUEL or a DEAD DINO or Devonian Algae making HYDROCARBON energy FFS.
HYDROCARBONS ARE RENEWABLE ABIOTIC ENERGY SOURCES MADE AT THE CRUST AND MANTLE AND WE HAVE THOUSANDS OF YEARS OF SUPPLY.
Words and Terms matter.
Indeed.
I have never received a sensible response to the question, “How do we know oil isn’t being created at volume faster than we are using it?”
Often people try to respond with the point that a unit of oil takes a long time to be created, which is probably true, but they always fail to appreciate just how many units are being created at the same time.
Gridwatch 10am on a very sunny day “down south.”
The massively subsidised windmills and solar are providing a grand total of 23% of our energy consumption.
Gas, 30%.
Interconnectors 25%
We obviously need more windmills and solar.
You need a /satire tag
And that means the electricity via the interconnectors will be setting the wholesale price – and it won’t be cheap b
A sensible, pragmatic government would take the present crisis as evidence that we cannot rely on foreign sources of oil and gas, and that we need to exploit the plentiful resources that lie within our territory. They would get the oilfields and gasfields open and producing. Not the idiots in the present government. They will just use this as “proof” that we need to move away from fossil fuels and rely solely on green energy. They’ll ignore the inconvenient truth that hydrocarbons are necessary as a raw material for a range of vital industries, and that without fossil fuels to back them up, our “renewable” energy sources are a useless ornament when the sun doesn’t shine and the wind doesn’t blow.
The current Govt couldn’t make a correct decision if it was paid. However, the Conservatives were almost as bad. If they hadn’t been defeated at the Elections they would still be pursuing this green nonsense.
Vote Reform, who else will solve our crises?
Fossil Fuels provide 85% of the worlds energy. Silly countries like the UK who have been captured by the UN and WEF Dogma about us becoming wealthy using up more than our share of the fossil fuels in the ground, are prepared to impoverish their citizens and destroy their Industrial Base so as to be the goody two shoes CO2 emissions reduction champions because they are fully aligned with the Politics and are poisoned with contempt for their own citizens and forcing them into energy poverty. —–Eco Socialist SCAM
“The reason is simple. Roughly one fifth of the world’s oil consumption and a similar share of global LNG trade passes through the Strait of Hormuz, making it the most critical energy marine chokepoint on Earth.” 85% to Far East, of which about half to China. So why do we here care? But only 2% of petroleum consumed in the USA and zero gas goes past Hormuz. The USA being mostly self-sufficient in oil and gas – so Trump is bothered about closure of Hormuz Straits, because… ? And now USA has Venezuelan oil too….nice one Trumpie. Only 4% of oil and 10% of LNG transiting Hormuz is bound for Europe. Its closure is no biggy, therefore. It’s the destruction of LNG processing that is the problem for Europe. And Europe: if only there were an alternative supply of oil and gas, like Russia – Oh wait a sec. Or if only Europe had shale gas beneath its feet. Oh wait. And remember how the Middle East could be covered with sunbeam catchers and electricity delivered to Europe via interconnections? Are pv panels drone and missile immune? I’m 73. Oil crises? Been there; done that; read the book; seen the… Read more »