The factoid thrown around is that roughly 20% of the world’s oil supply travels through the Strait of Hormuz. Since it closed, my local gas prices in one area of the US midwest have gone from $2.60 to now $4.10 presumably as reserves have been used up.
I could understand a 20~30% increase in price to correlate with the reduction in supply, but what are the economic factors that lead to what feels like such a disproportionate increase?
Oil is globally priced so even if you have your own production in America, prices go up there as well. It benefits the producers a lot but leads to higher prices for the
slavesconsumers.You will therefore have oil in America but Asia and China will have a huge crisis since 80% of the oil from Hormuz goes to those countries, and now its cut off by Americas blockades.
So higher prices in America, but it forces China, India, South Korea and Japan to try and buy oil from America.
So this war is about making those countries depend on Americas goodwill for resources. If they dont go along with what Trump is saying, no deal.
Not true.
Prices here in South America have not gone up.
The only reason prices would go up globally would be capitalism, if you trade it for profit.
Nobody should be allowed to profit from burning fossil fuels.