Larry Williams Drive

The blockade of the Strait of Hormuz has begun and we now have a clearer picture of how it’s going to work. It doesn’t just cover the strait itself. It runs along the entire Iranian coastline, out through the Gulf of Oman, which the strait feeds into, and then further again into the Arabian Sea. At least two ships have already been turned back. One of them, unsurprisingly, was headed for China. Now here’s the key point. If - and it is a very big if - the United States can successfully keep oil tankers away from Iran, the impact could be fast and severe. We’re talking 10 to 20 days. Iran can apparently store only around 13 days’ worth of oil production. Once those tanks are full, they’re forced to start shutting oil wells. And that’s something they really don’t want to do. Shutting down an oil well can permanently damage its production capacity. There’s no guarantee you ever get it back to where it was. Restarting wells is expensive, risky and slow. Beyond that, there’s the wider economic hit. Around 90 percen