Markets Are In Denial About the War in Iran

​Investors have been weirdly chill about a spiraling crisis that shows no signs of ending. Remind anyone of climate denial?

Something strange is happening in the global economy.

The Strait of Hormuz—the single most important body of water on earth for global energy markets, and markets for lots of other commodities too—has been closed for nearly a month as the U.S. and Israel continue their illegal war of choice in Iran. There are few signs that it will reopen anytime soon. Some tankers are managing to trickle through. Saudi Arabia has rerouted some crude oil through its pipeline to the Red Sea. Still, an estimated 10 million barrels of a day, conservatively speaking, are trapped. Declining storage space means that Gulf oil producers are going through the onerous process of stopping drilling at wells that likely won’t be able to start pumping again for months if and when the strait becomes navigable. A single attack on Qatar’s gas facilities knocked out a whopping 17 percent of liquefied natural gas export capacities. Analysts now predict that a gas supply crisis that has so far been most acutely felt in Asia could soon spread to Europe. Poorer countries face not just higher prices but catastrophic shortages of (among other substances) oil, gas, and fertilizers critical to food production. So far, Russia has been one of the main beneficiaries of this crisis; the U.S. moved to ease sanctions on its oil earlier this month. This week, Ukrainian attacks on Russia’s oil infrastructure took out at least 40 percent of its oil export capacity.

An oil researcher I........

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