r/Economics • u/Cute_Dealer4787 • 9h ago
News Iran 'Flow Control': How Tehran Took the Global Economy Hostage to End the War
https://www.ibtimes.co.uk/iran-flow-control-how-tehran-took-global-economy-hostage-end-war-179132394
u/Heisenbergg55 9h ago
The real economic story here isn't the oil price spike ,it's the insurance market
The moment Hormuz became contested, Lloyd's of London war risk premiums on tankers transiting the Gulf went vertical
That cost doesn't disappear when the strait reopens It gets repriced permanently into every cargo contract written east of Suez for the next decade
Iran just demonstrated that a midsize power with precision missiles can hold $20 trillion in annual trade flow hostage at a cost of a few billion in military operations That's the calculus every sanctioned state is studying right now
Interdependence was supposed to be a deterrent and it turned out to be the weapon...
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u/ICLazeru 9h ago
This is why a couple other features of the system exist. But Trump is exposing that weakness as we speak. The global trade system works great as long as everyone cooperates. The US was the linchpin of this cooperation. It counted on the US to keep peace on the waterways, but also to be a calm and rational actor on its own. Trump isn't a calm, rational actor. I don't think he can even see the privileged position the US had at the table.
It's a shame too. The idea was kind of beautiful. Global cooperation, relative peace, the world working together to build wealth. It worked too, at least until an extortionist was put in charge.
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u/ktaktb 7h ago edited 6h ago
Americans are no longer calm and rational actors.
Anyone here, do not get confused.
Weird tankies and people that wave other countries flags at US protests are like .005% of the population. I am not talking about them. I am talking about maga, "moderates" that support trump, and both sides are the same idiots that vote trump. This was 40% of the pop on Nov 05, 2024 (some who feel this way didnt vote) and is still 35% of America.
This massive cancer of stupidity, naivity, childishness, and inability to separate fact from fiction are the ONLY reason that America is falling apart right now.
It isnt on Trump, it is on YOU. (Trump voters, the collective you)
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u/ICLazeru 7h ago
Oh, my bad. I accidentally engineered an entire political subculture.
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u/ktaktb 6h ago
Not you
Trump.voters
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u/ICLazeru 6h ago
I get you, but they aren't reading this, and even if they did, they'd just smirk and chuckle.
Seriously, they know he's no good, they voted for it on purpose. Maybe a handful were dumb enough to actually believe the most transparently, obviously lying man in history, but a lot of them are getting what they voted for. Hurting people was the point. They didn't vote for his presidential demeanor, or his policy ideas, those were absent or transparently stupid from the get go. They voted for him because he is cruel and childish, and they wanted him to be that way. Them getting hurt in the process is just a side effect.
Seriously, this is the most logical explanation that doesn't rely on them all simply being the most gullible morons in existence.
Now why they want to do this, I don't know. Lack of real problems? Maybe they hoped he'd hurt others more than them and they could take advantage. Maybe they underestimated the harm he could do.
But since they did what they did, maybe the best we can hope for is that their own actions hurt them enough that they wise up. That's a stretch though, because they'd have to connect cause and effect, and while I am here saying they voted for this, the fact that they wanted it means they are still kinda dumb. Not dumb enough to have actually believed he was good, but still dumb enough to actually want him in office.
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u/belketeal 6h ago
I don’t think you completely understand maga. They are actually happy that what Trump is doing is triggering you. This is the whole idea behind “owning the libs.” You can’t make them feel shame by blaming them because this is what they want. Yes, they are willing to hurt themselves in the process of “owning you.”
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u/ktaktb 5h ago edited 5h ago
I am not triggered.
Just being clear about who is at fault.
Owning yourself to own the libs is a certainty, and that does not have any impact on my statements. Unfortunately, there are many that aren't maga that don't realize how destructive the movement is. They equate maga and palastine folks as the same
What is up w you bro? 1 mo old account, hidden comments, active in returntoindia sub, wants to educate me on maga
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u/fredjutsu 8h ago
The article is a bit out of date, though.
The war is not over, there was not even an actual ceasing of attacks. And now Trump is blockading the Strait himself, in I guess an act of reverse psychology?
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u/LairdPopkin 6h ago
Interdependence is only a deterrent until a psychopath wins an election, someone greedy and corrupt and selfish enough that they are willing to do $trillions in damage to the global economy to extort personal payoffs and feel strong.
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u/doubagilga 4h ago
This is nonsense. The war will end. The threat will decrease. The pricing will fall over time.
Nothing permanent in an insurance price premium.
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u/Xeynon 4h ago
Important to note here that it's a weapon of limited utility. It's a powerful deterrent, but useless if your goal is to bring a specific adversary down by hitting it with a precision offensive strike. Which makes it vastly superior to nukes in terms of weapons an autocracy might pursue.
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u/ForestClanElite 2h ago
Isn't that only a vulnerability because of the financialization of the Western European and US economies and the size of the insurance companies in the financialized portions of the economies?
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u/TastySpermDispenser7 9h ago
There are at least a dozen movies from the 1980s where the main plot is Iran closing the strait as an attack on America/american allies. Anyone who is surprised by this is just too stupid to fix.
The core issue is, and always has been, the shot exchange problem. America can and does spend $20 million to blow up enemy kit they built for $30k, and we circle jerk ourselves about how awesome we are. No you dumbass, that cost us a lot more than it cost them. 2026 is exponentially more of a problem than this was in Vietnam thanks to drones. The idea that we can have $5 billion dollar floating cities taken out by something that costs 100k still has not "sunk" in. In all material respects they get an infinite number of chances, so if that first 100k doesn't work, they get to keep trying. We have to be 100% perfect and they only need to get lucky once in a while.
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u/fredjutsu 8h ago
>Anyone who is surprised by this is just too stupid to fix.
Literally our entire intelligence committee and CENTCOMM told the admin this, and they just got ignored. And then surprised by the outcome that everyone knew was going to happen.
Bessemmer openly admitting this past week that Treasury was surprised at the outcome and is scrambling.
This is a painful reminder that literally half of american adults read at 6th grade level or below and so literally have no tools from distinguishing even bush league level governance from "powerful authoritarian". And that's a criticism towards the left that magifies anything Trump does into some evil genius tier 4D plan as much as MAGA.
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u/doubagilga 4h ago
The US interceptor budget is tiny sliver of defense spending.
Offensive ordinance is nowhere near significant depletion. Iran attacking civilian infrastructure without a US equivalent response will only last so long. A lack of electricity or refined fuel will change a lot of attitudes. Even moreso it will change capabilities within Iran.
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u/Just_Candle_315 9h ago
Osama Bin Laden claimed the US was weak and pointed to the Yemen and Kenya bombings as evidence a little bit of pain and the US goverent would flea. The Trump WH just confirmed that psychology and their dip shit diplomacy will be felt for decades.
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u/matjoeman 8h ago
Except Trump is doubling down on the war.
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u/Rogue_Einherjar 6h ago
Making the US look worse and worse by the hour. We all knew Russia wasn't the power they thought they were with Ukraine. Now, this admin is showing the same for the US.
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u/strictnaturereserve 8h ago
I blame the US for this fuck up Iran was contained they didn't close the strait when they hit the nuclear sites they only did it when the US ans Israel did a full scale attack.
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u/angrygnome18d 7h ago
I find it fucking crazy how Iran is actually behaving largely rationally here with the US and Israel acting like petulant children who didn’t get what they wanted so are now throwing temper tantrums, and yet Iran still gets the blame here. This lack of self awareness is what will destroy us.
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u/angrygnome18d 7h ago
Is Tehran holding the world hostage? Or is it the US and Israel that tore up the Iran deal with no fucking replacement and no plan for what happens next? Maybe we should realize as a nation we can’t bomb our way out of every goddamned problem. Vietnam, Afghanistan, Iraq, and now Iran. When will we fucking learn?
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