The Oil Squeeze Tightens Time is not on the world economy’s side .................. the ongoing consequences of America’s disastrous war with Iran. ................ The Strait of Hormuz remains closed. Iran has made a proposal for reopening, but Trump, according to the New York Times, is “dissatisfied” with the plan, among other things because “accepting it could appear to deny Mr. Trump a victory.” Indeed: Claiming victory tends to be hard when you’ve lost, badly. .................. How long will it take before Trump accepts the reality that he doesn’t have the cards, that in the end his Iran venture will be resolved in a way that leaves Iran stronger and America weaker than before the war? Markets are growing increasingly pessimistic. ..................... The price drop after the ceasefire was announced has been almost completely reversed. And the longer reality denial lasts, the worse it will get. ................... ultimately the energy crisis is physical: if the flow of oil from the Persian Gulf remains deeply depressed, at some point there has to be enough “demand destruction” to bring consumption down to match the reduced supply. ................... So far, despite much higher oil prices, demand for oil has fallen by only a fraction of the loss of supply. Instead, the world economy is running by taking oil out of storage. Since there’s only so much oil in the tanks, this can’t go on. So if the Strait doesn’t reopen, prices will have to soar high enough — and inflict sufficient economic damage — to destroy another 11 or more million barrels a day of demand. That’s a lot. ...................
But Trump is talking about his ballroom.
.............. Trump is clearly dissociating. His fragile sense of self-worth depends on constantly believing that he’s a winner while others are losers. Now he’s faced with the reality that he, more or less single-handedly, led America to humiliating strategic defeat. .............. The fall of Viktor Orban was a big defeat for Trump. ............. while he may be done with his war, the war isn’t done with him — or with the world economy. And the longer his fugue state lasts, the worse the damage will get.
I left Google DeepMind, moved from SF to NYC, all within 2 weeks to join @quadrillion_ai — to build the future of automated research intelligence with the highest slope founder and most talent dense team.
