DAVID BLACKMON: Strait Of Hormuz Closure Impacts Much More Than Just Oil

Photo by PATRICK T. FALLON/AFP via Getty Images

The world’s main focus related to the de facto closure of the Strait of Hormuz by the Iranian government over the last month has been its impacts on flows of oil. It’s a natural reaction given that fully 20% of global crude supplies exited the Persian Gulf via the Strait each day prior to Feb. 28. The denial of those oil flows has resulted in a historic price spike for oil and refined products like gasoline and diesel, along with shortages in an increasing number of importing countries.

While many other key products also must transit the Strait of Hormuz to flow into the world market, focus turns immediately to oil because the impacts hit billions of drivers in the pocketbooks almost immediately through a simultaneous increase in prices for gas and diesel at the pump. For drivers, periodically refueling your car is not optional: It’s a necessity of life and thus unavoidable. The rise in U.S. gas prices of $1 per gallon in the span of a month is not just an emotional hit to millions of Americans – it also amounts to a de facto regressive tax that hits hardest on those who can least afford it.

So, we focus on the oil impacts first because of their immediate financial hit. But........

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