The most important place in the global economy right now may be a strait only 39 km wide.

The Strait of Hormuz. Approximately:

• 20 million barrels of oil per day
• ~20% of global supply
• a large part of the world's LNG

If this route stops, the impact is immediate.

Countries that directly depend on this route to export oil:

• Saudi Arabia
• United Arab Emirates
• Kuwait
• Iraq
• Qatar

There is no alternative infrastructure capable of quickly replacing this flow.

Iran knows it cannot win a conventional war against the US. The numbers explain why. The US spends $877 billion a year on defense.

That's more than the next 10 countries combined.

So the Iranian strategy is different.

Asymmetric warfare.

Instead of winning militarily, the objective is to increase the economic cost of war.

Historically, this includes:

• attacks on oil tankers
• naval mines
• attacks on refineries
• regional proxies. Small actions can generate global shocks.

Real-life example.

The attack on the Saudi Abqaiq refineries in 2019.

Result:

• 5% of global oil production was taken off the market in hours.

A single event changed the global market.

The economic impact comes primarily through inflation. Studies by the Federal Reserve show that:

👉 each $10 increase in oil adds approximately 0.2% to inflation.

Approximate example:
$80 → inflation ~2.9%
$100 → ~3.6%
$130 → ~3.9%
$150 → ~4.3%

Another sign of stress has already appeared.

The cost of transporting oil on supertankers (VLCCs) has skyrocketed.

At times, freight costs reached almost 20% of the value of the oil itself.

There is also an indirect geopolitical effect: China.

• 87% of Iran's exported oil goes to China
• 55% of Venezuela's oil also goes to China

These two countries supply approximately 2.5–3 million barrels/day to Chinese refineries.

This oil is usually sold at a discount.

Frequently $7–11 below Brent.

In other words:

cheaper energy → industrial advantage for China.

Disruptions in these flows force Beijing to buy more expensive oil on the global market.

Another curious phenomenon has recently emerged.

War has begun to be bet on in prediction markets.

On Polymarket, traders are betting on scenarios such as:

• duration of the war
• closure of Hormuz
• deployment of American troops
Some bets suggest conflict until September.

There are also contracts betting that the US may send troops to Iran.

So far, Washington denies any plan for a ground invasion.

But the markets are already pricing in the risk.

American domestic politics also come into play.

Trump's approval rating is currently in the negative double digits. Some recent polls:

The Economist
• 38% approval
• 58% disapproval

And most Americans do not support the war.

Some polls indicate:

• 43% disapprove of attacks on Iran
• 27% approve

When the question involves sending troops, opposition reaches nearly 60%.

The real political problem today is something else entirely:

the cost of living.

The so-called affordability crisis dominates the polls.

Historically high gasoline prices reduce presidential approval ratings.

With midterm elections in October, expensive energy becomes a political risk.

Interestingly, markets typically absorb wars quickly.

Average return of the S&P 500 after conflicts:

1 week → ~0%
1 month → +1.5%
3 months → +2.8%
6 months → +5.9%
12 months → +8.4%

In other words:

Wars rarely bring down markets for very long.

The real risk is something else.

Energy.

If Hormuz remains open → the market continues.

If it closes → the world quickly discovers what $200 oil means.