Suddenly Hormuz is less crucial... Paul Krugman [View all]
Is Russia burning?
Are we back at war with Iran? Did the war ever stop? The US is, once again, bombing Iran while Iranian drones strike shipping. Iran, giddy with its success in defying America, is demanding sovereignty over the Strait of Hormuz, while Donald Trump is saying no, he owns the Strait and will collect 20 percent tolls.
Folks, this is bad. U.S. national security policy is now entirely in the service of one man’s vanity. We got into this mess because Trump thought he could win an easy victory that would let him strut around feeling powerful. Now we can’t get out because he won’t admit that his war has been a humiliating failure.
The good news is that Trump’s temper tantrum will probably do less economic damage than one might have expected — because the cease-fire that is apparently over wasn’t doing as much good as one might have expected. The fact is that there is now a disconnect between events in the Strait of Hormuz and the energy prices that matter. This disconnect is coming from a surprising place, another war that was supposed to yield a quick, easy victory but didn’t: Vladimir Putin’s attempt to conquer Ukraine.
To see what I’m talking about, start with a question: Why was oil so cheap just before this latest confrontation?
Continued https://open.substack.com/pub/paulkrugman/p/suddenly-hormuz-is-less-crucial-than
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