The Last Barrels
$65 Olive Oil Is Just the Beginning
The conflict in the Middle East has been running for nearly a month now.
Every major country that has something valuable has started keeping it for itself.
China has stopped exporting refined products. Russia has banned ammonium nitrate exports. Gasoline stays home from April through July. Everyone is hoarding. And that’s exactly what should worry you — because when the big players close off, the rest of the world is left with crumbs.
This is a survival order.
Europe imports energy. Japan imports energy. Taiwan, New Zealand, Australia — these are all island economies dependent on imports. And then there are poorer countries that don’t even have the money to compete in this market when prices surge. Nigeria, Pakistan, Bangladesh, Egypt. The wealthy will outbid everyone for a barrel. The poor will stand in line and take whatever is left.
North America is in a different position. Oil, diesel, jet fuel, fertilizers, helium, uranium. Fortress North America survives. Trump won’t allow their consumers to pay global prices for long while the rest of the world burns.
If the U.S. and Canada shut themselves off, and everything suggests they will, the rest of the world will burn.
Olive oil in Australia already costs $65. 65 bucks! That is what the early edge of this crisis looks like. When energy shortages deepen, it is about empty shelves. Crime goes up when people cannot afford to eat. Supply chains break. And when they break, the panic that follows creates shortages far beyond energy. Medicine. Food. Basic goods.
We are preparing for global shortages of nearly everything, a financial system under stress it was never built to handle, and a level of social disruption most people in the developed world have never experienced in their lifetime.
The closure of the Strait of Hormuz is a historical event larger in its economic consequences than COVID. COVID shut down demand. This shuts down supply. And shutting down supply is far harder to fix with a stimulus check.
The only question that matters now is not whether the pain arrives. The pain is already here. The only question is how bad it gets and where you are standing when it does.
Most people will spend the next six months confused about why everything keeps getting more expensive and nothing seems to work anymore. Most people will watch the Strait. A small number are watching something else entirely. Here is what they already know.
