Oil's Chokepoint: Is The Strait Of Hormuz Truly Vulnerable?

Summary

• Geopolitical tensions between Iran and Israel have spooked markets due to fears of surging oil prices and inflationary pressures.
• A closure of the Strait of Hormuz would be catastrophic, but I believe this scenario is highly unlikely for economic, political, and logistical reasons.
• Iran has repeatedly threatened to block the Strait but has never acted, as it would hurt its own economy and is difficult to execute.
• While the risk of escalation exists, I do not expect this conflict to trigger a global recession; oil prices above $100 are not my base case.

Racide

Everyone is talking about the war between Iran and Israel, which is once again in the media spotlight due to its belligerent stance. The financial markets seem quite nervous about this news, mainly because it could have a crucial impact on energy prices. The

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