The US and Iran both announced this morning that the Strait of Hormuz is now fully open for the duration of the current ceasefire between Israel and Hezbollah. While the news is positive on the surface for global commerce and the global energy-economic crisis, few developments better illustrate the situation Donald Trump and Benjamin Netanyahu have gotten the US, the global economy and Israel into. What we see now is that the health of the global economy is, going forward, subject to fighting between Hezbollah and Israel. In a way Iran has always had a tacit or latent hold on the Strait of Hormuz. Simple geography tells you that. But it was only when Donald Trump forced the matter that Iran learned how comparatively easy a lever that was to pull. They didn’t have to sink any oil tankers and even seriously damage one. They just had to issue threats and do some drone harassment. Maritime insurance markets would take care of the rest. There’s no way not to see this as a massive strategic win for Iran.
