pull down to refresh
Even though there's only one Strait of Hormuz, there are multiple alternatives of getting goods from point A to point B, even if the alternatives are currently worse.
yup, plenty. And give it enough time, we'll (well, them peoples, over there) will build pipelines and all manner of things to get the oil passed the gatekeepers
I don't know the exact histories, but some of the tweets I link (the German canals, the Swedish ones) and obviously the Europeans going around the Cape of Good Hope being prime examples
Iran already has the direct rail link to Xian China, which is scheduled to expand to Turkey and then into Europe as part of the belt and road Chinese global infrastructure program.
While the rail route may not be capable of carrying a lot of oil or gas it can carry other supplies.
It is not as if Iran and China have not prepared for this invasion.
The stated purpose of the toll is war reparations which seems perfectly reasonable and ostensibly not permanent either.
The economic value of peace would be significant for the entire region- in fact the world, but it seems USA and its petrodollar dare not allow free trade because USA cannot compete on such a footing.
USA is engaged in multiple blockages globally blocking Russian, Venezuelan and now Iranian oil, so that it can charge 10X the price for US LNG exports.
Chevron is a global rentseeking oil baron.
Donald Trump is owned by Chevron.
One is tempted to say these are pure monopolies, not subject to traditional forces of market competition, due to their geographical uniqueness. There is only one Strait of Hormuz, and you cannot construct another Strait of Hormuz to compete on price and quality with the one that already exists.
That being said, it did make me think of alternatives and substitutes. Even though there's only one Strait of Hormuz, there are multiple alternatives of getting goods from point A to point B, even if the alternatives are currently worse.
But if the chokepoint monopolist degrades the quality of passing through the chokepoint by too much, which Iran clearly is doing, then the people will start to develop the alternatives more fully. Over the long run, this could erode the chokepoint monopolist's position.
I wonder if we have historical examples of exactly that: the chokepoint becoming so bothersome to use that better alternatives get developed, leading to a decline in the power and status of the chokepoint holder.