We’re missing the economic fallout of the Iran war — just like we did with Covid
The author warns that the ongoing conflict with Iran and the closure of the Strait of Hormuz is causing a significant disruption in global oil markets, with supply down by more than 10 million barrels a day. The author draws a parallel with the Covid-19 pandemic, suggesting that the economic impact of the Iran crisis is being underestimated.
The conflict with Iran and the closure of the Strait of Hormuz is causing a significant disruption in global oil markets. The International Energy Agency reports that global supply is down by more than 10 million barrels a day in March, the largest disruption in the history of global oil markets. The author compares this to the 1973 oil embargo, which pulled 7 percent of global oil supply offline. The author warns that the economic impact of the Iran crisis is being underestimated, drawing a parallel with the Covid-19 pandemic. The S&P Index hit an all-time high on February 19, 2020, just before Italy reported its first cluster of Covid cases, showing that markets can be slow to anticipate major crises. The author believes a similar economic blindness is at work today with the Iran crisis.
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