No, I’m not crazy for talking about Trump working an angle by increasing Iran’s power over the world’s oil supply. In fact, it was someone much smarter than me with real, serious credentials that suggested why Trump might want Iran to be able to choke off other countries oil whenever it wants. When you factor in Trump’s always looking for a way to grift, and sticking it to another world power it actually makes sense. Trump might be angling to hurt China, AND do a solid for his pals in the U.S. oil industry – providing he’s lined up getting a cut of their increased profits of course.
Even the average person could have told Trump starting a war with Iran was likely to lead to them doing what they’ve done – closing the Strait of Hormuz. A fifth of the world’s crude oil gets shipped through it and some countries, China in particular depend on it. I’m a senior citizen now but even in grade school in the 1960s in geography lessons we were shown a map of the Strait and taught about how important it was.
As I grew older and especially after the Shah fell the question of would Iran actually close the Strait of Hormuz has been out there. Yet for all the damage Iran’s leadership has done in the world since 1979 that line was never crossed. No doubt they worried about the consequences for them if they took that step. Despite being a pariah to much of the world they worried about the consequences if they did what OPEC did (twice) back in the 1970s. So barring an existential reason (like a major power starting a war with them) the risk didn’t seem worth the cost. Having “crossed the Rubicon” now they do. Yes, they’ve sustained a lot of dead and wounded and have a lot of rebuilding they’ll have to do BUT they also will wield more influence in world affairs.
Anyone with half a brain could have told Trump what even he likely knew which was that starting a war with Iran would likely lead to the closure of the Strait. He certainly had the Joint Chiefs and other advisors telling him that. Unfortunately one of them was SecDef Pete Hegseth that probably told Trump that would be a good thing – give us a reason to invade Iran and show off his shiny new ‘warriors only’ military. Trump however will ignore what he knows to be sound advice in favor of his own agenda. That brings me to an article from Market Watch which digs into why Trump might have taken action that would lead to this rearranging of the world order.
They start off with the ‘usual’ hits about the war. Stuff like Trump blundered into it or was tricked by Netanyahu. Then comes what you’d expect from a financial reporting outlet. A brief mention of humanitarian consequences and quickly moving to talk of money related things. The price of oil up around $100 a barrel, the cost of gas at the pump and the government of Iran now firmly in control over -one-fifth of the world’s oil. I should also add what the article doesn’t – having killed off the top leaders of the old regime we’ve got a much younger and MORE hardline one in their place. Yo Trump – Iran ain’t Venezuela where Trump could just plug in a replacement who’d do his bidding.
They move on to reporting Iran is said to be charging a ‘toll’ of one dollar a barrel to allow oil tankers through the Strait using non-traceable cryptocurrency or Chinese yuan. They go on to say Trump is surprised Iran would act in such a ‘dishonorable manner.’ In summary the article walks us through what’s happened, what’s happening now and that conventional wisdom is that 1) All of this was predictable, and 2) Trump ignored common sense (including his own) and sound advice and for whatever reason (i.e. Epstein distraction) impulsively did something stupid. Makes sense when you consider this is Trump we’re talking about. Then Market Watch poses a provocative question:
But what if the conventional wisdom is wrong?
That’s the hypothesis of one of the world’s shrewdest and most respected analysts of geopolitics and energy, Cambridge University political economy professor Helen Thompson. In a couple of recent broadcasts, she has argued that this entire outcome — including the apparent closure of the Strait of Hormuz — may not be a bug of the war at all, but a deliberate feature.
As Professor Thompson explains driving up the worldwide price of oil and keeping it there might be a core war goal of the Trump’s. It would hurt China, which depends on imported energy, and helps America since we are a net energy producer. And if that’s the case she argues then Iranian control over the Strait of Hormuz would, ironically, be a desirable outcome. Thinking about it, and the weird goings on in what passes for Trump’s mind that’s a real possibility.
“The Trump administration thinks through the lens of resource competition,” Thompson explained.
“You have to consider the possibility … that actually part of what’s going on isn’t just about Iran, it’s about the Trump administration trying to hurt China,” she told the conservative-leaning website UnHerd.
Talking with Bloomberg podcasts Thompson said the Trump administration might be trying to reset ‘the energy part of the world’ geopolitically:
That, says Thompson, is the consistent “thread” through the second Trump administration’s foreign policy — including the intervention in oil-rich Venezuela and its attempts to destabilize resource-rich Greenland. It is also, she points out, part of the geopolitical blueprint that the administration laid out last fall.
Professor Thompson has plenty more to say. I’ve noted the U.S. is a net energy producer. This all could lead to new sales to Europe of liquified natural gas at elevated prices. And, as for China given the energy demands for computing that would increase AI capability it would hamper China. (In theory – I’ll address that later) I urge you to read the entire Market Watch article because crazy as it sounds they make a compelling case there is an actual method to Trump’s madness with this war. It led to Iran doing what until now had been one of those ‘it could be done but they’d never actually do it’ things. Now that it’s been done they are more likely to do it again. In fact just the threat will give them a seat at the table of world politics they didn’t have before.
Driving up energy prices and keeping them up benefits oil producers in states that support Trump and the GOP. The ever transactional Trump might not have consulted Congress or any of our allies before starting the war but it’s easy to believe he’d have a chat with Big Oil executives who would benefit – to make her he got his own cut of the action when the higher prices resulted in way bigger profits started rolling in. That’s why I chose a picture of Trump with a smug look on his ugly orange face. He figure’s HE will get HIS and that’s all he cares about.
For all his tough talk Trump likely doesn’t care if Iran makes out like a bandit when the dust settles. If oil is ninety to a hundred bucks a barrel on the world markets a dollar a barrel to allow it through the Strait of Homuz will be chicken feed to those who buy and refine it. The cost would of course be passed along to consumers. As long as Iran doesn’t get greedy it will make plenty out of all this. So the “haves”, the rich will get richer and most of us will get screwed.
If you’ve read this far you’re probably saying yes, this is all about oil and rich folks getting more money. It not only is a natural thing to think there’s truth to it. The problem however is that that’s not all the truth (or consequences) we and the rest of the world have to face. OIL isn’t the only critical commodity that gets shipped through the Strait. Twenty percent of the world’s oil supply is a big deal. However, as I wrote about two days ago ONE -THIRD of the world’s fertilizer gets shipped through it! Not that many people read it but I guarantee come fall (if not sooner) when costs at the grocery store go up you’ll notice the disaster that’s already happened with all those cargo ships full of fertilizer sitting there unable to pass through the Strait. It’s planting season right now and a lot of farms including in the U.S. are already paying jacked up prices or won’t be able to buy it at all. That means lower crop yields which means lower prices.
People “get” oil. They buy gas, diesel and especially northeast heating oil. So most folk, while they don’t monitor world oil markets each day notice when news breaks about the price of a barrel of oil changing in a significant way. However, even in small town/rural America an awful lot of people who might at least know some basics about farmers needing fertilizer don’t understand how and where it’s made. More to the point they don’t know how much of it comes from the middle east and has to be shipped through the Strait of Hormuz.
Some countries including us are more dependent on that supply route being open. In Trump’s fantasy world China will be hurt by higher oil prices which to some extent is true. (I said I’d get to this) However Iran can cut a deal with China (with whom they have better relations that with most countries) to get China oil (and natural gas) at a lower cost than on the world markets. The same would be true with fertilizer shipments which matters because China is a major agricultural country. (Russia can get it’s supply over land/train routes in addition to being able to make their own) WE on the other hand are lacking in the ingredients to make as much fertilizer as we need and that makes US more dependent on imports.
My point is that Iran’s newfound ability to control world oil prices will also give it even more ability to control fertilizer prices! That means it will literally give them the ability to have outsized control over food production. Not just crops that are consumed, but those grown to feed livestock.
What I’m driving at is that assuming Professor Thompson is on to something with her theory that Trump started the war to drive up (and keep up) the price of oil both to hurt China and boost the profits of U.S. energy producers he still didn’t think it through. Food is going to cost more. Farmers who for reasons I’ll never understand (that’s a whole different article) hate Democrats and vote for Republicans.
Even as they lose farms that have been in the family for generations they’ll curse Democrats and vote for the Republicans (and their policies) that cost them their farms. However the rest of us will if Democrats do the job right learn that the higher cost of food can be tied directly to both Trump’s war and the gutless GOP that wouldn’t (and still won’t) stand up to him in the first few days will make them pay at least at the ballot box. However the damage will have been done. Prices will go up and never come down to the level they would have been had Trump not empowered Iran.
In short, Trump might have intentionally permanently jacked up the price of oil because HE and his cronies don’t care about the cost of gas or increase prices for other things (plastic is a petroleum based product for example – think about how much is produced) because they’re rich. To an extent people can adjust. Less driving. Ride sharing. Public transportation etc. However unlike in WWII when so many could create “Victory Gardens” and grow much of their own food most Americans now are dependent on what they can buy at the store. Fertilizer is a commodity too and the price is going up and will stay up thanks to Trump’s war. We have to make sure people understand they’re going to get hit with not just one but TWO punches.
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“Yo Trump – Iran ain’t Venezuela where Trump could just plug in a replacement who’d do his bidding.”
Well, for what it’s worth, Venezuela’s new president isn’t exactly a “replacement [who’ll] do his bidding.” When Drumpf ordered that illegal move, Maduro’s vice-president (someone who largely agreed with Maduro) took over–as Venezuela’s constitution provides–and there really haven’t been any significant changes to Venezuela’s overall government or its policies.
Yes and no. Trump could have pushed to install the opposition candidate and an actual new government the people there want and voted for. I think it’s fair and accurate for you to point out that the swap in the top leader didn’t create a puppet government. At the same time I’d argue that while it’s still a repressive regime that takes for itself and screws over its people “suggestions” from Team Trump will often be taken as “We should be careful about rejecting Trump’s demands.” It’s a make noise about not being intimidated while continuing to act how the government there has long acted BUT if say Trump demands they allow & protect Chevron or another U.S. oil company to invest there then they’ll go along to get along. Of course to Trump’s astonishment and chagrin U.S. Oil companies aren’t really interested, at least anywhere enough to make huge investments in oil extraction down there.
“In Trump’s fantasy world China will be hurt by higher oil prices which to some extent is true. (I said I’d get to this) However Iran can cut a deal with China (with whom they have better relations that with most countries) to get China oil (and natural gas) at a lower cost than on the world markets. The same would be true with fertilizer shipments which matters because China is a major agricultural country.”
I was about to mention the same thing. If Drumpf and company thought that China would be too adversely hurt by increased oil prices, the fact that Beijing and Tehran are quite chummy can lead to some very alarming possibilities. Tehran agrees to sell China oil somewhat cheaply (even allowing Chinese tankers or Chinese-destined tankers to pass through the Strait “toll-free”) and Beijing offers sizable assistance in rebuilding, maybe even providing Tehran with material to help it further develop their nuclear program (you know–for energy purposes and turning a blind eye to any other nuclear possibilities). And, wouldn’t it be bad if Chinese scientists and researchers who were providing direct on-site technical assistance to Tehran might also, incidentally, make some good “human shields” against any further US or Israeli attacks on those facilities?
At a time when renewable energy sources like wind and solar are ALREADY CHEAPER than fossil fuels, it beggars belief that any sane person would think that making fossil fuels MORE expensive and harder to get are good ideas.
Any sane person.
So yes, that’s probably why he’s done it.
And as for fertilizer and helium, well, these people aren’t any good at working out the INTENDED consequences of their actions, undoubtedly working out any UNINTENDED consequences is well beyond them.
A half century ago there was a guy who’d been a nuclear engineer with real experience in the technology. Both in ‘minirturizing’ a reactor to a point where it could power Naval vessels but also in cleaning up the mess of a major nuclear accident. He became President and was much maligned during his single term. Even Democrats in the DC establishment looked down their noses at him.
However President Jimmy Carter had a vision he’d developed (again, he was trained as an engineer at the U.S. Naval Academy at Annapolis and was a VERY good one and Naval Officer) a comprehensive plan to diminish our needs for fossil fuels – and develop renewable energy. For those not old enough to remember OPEC (Organization Of Petroleum Exporting Counties) and the middle eastern oil cartel they truly were this country and the world were put through TWO embargos. Gas prices shot way up and evening news routinely showed insanely long lines as gas stations and the major outlets always had economists who were credible talking about the economic impact of the embargos.
You’d think given the troubles that generated in the 1970s the country would have been more receptive to the speech Carter gave outlining what he believed we could and should do. Yet, as I said even Democrats in DC gave it the cold shoulder. Then Reagan came along and wasted no time killing what little Carter had started.
Imagine if this country had listened to Carter and followed his lead. We would have led the world in clean, renewable energy technology and production. The need for oil from a part of the world so often unstable wouldn’t impact world affairs the way it does. Certain nations wouldn’t be so rich they could buy up/off damned near anyone and anything they wanted. We’d have a better, more stable world and global climate change wouldn’t be the crisis it is.
Alas, even Democrats in power liked the mocking of Carter as “that peanut farmer from Georgia” (then a not all that significant southern state) instead of an Annapolis graduate who helped create the nuclear Navy. Someone who, had his father not died and left the family business in deep trouble was about to become Executive Officer of one of the new class of nuclear subs he (as a member of Rickover’s staff) helped create. He was a good officer and well respected and destined to advance to Admiral’s status himself.
But is was a lot more fun for people, including and especially the DC establishment (both politicians and press), most of whom weren’t as smart (or capable) as he was to mock him.
As the old saying goes: ‘Of all sad tales of now and then, the saddest of all is what MIGHT have been.’