Hawzah News Agency- That assumption no longer holds. A fourth center of global power is quickly emerging — Iran — that does not rival those three nations economically or militarily. Instead, its newfound power derives from its control over the most important energy choke point in the global economy, the Strait of Hormuz.
The strait had long been an international waterway through which ships from all countries could travel. But the joint military campaign that the United States and Israel began waging against Iran this year has prompted Iran to create a selective military blockade of the strait.
Roughly one-fifth of the world’s supply of oil and liquefied natural gas moves through the strait. There are no real alternatives to these supply routes in the near term. If Iranian control over the strait persists for months or years, it will drastically reshape the global order to the detriment of the United States.
Gulf states depend heavily on energy exports for state revenue. When insurance rates spike and shipping becomes uncertain, the fiscal impact is immediate. Governments adjust. Cargoes are rerouted. Contracts are renegotiated.
If uncertainty persists, the Gulf arrangement will inevitably change, giving way to a different regional order — one in which the Gulf states increasingly accommodate the actor that can most directly influence the reliability of their exports. That actor is now Iran.
If disruption to the energy supply persists, the effects will be widespread. Higher insurance and freight costs will raise prices. Trade balances will worsen. Currencies will weaken. Inflation will rise. Energy dependence will begin to shape policy. Governments will prioritize access to energy. Diplomatic choices will narrow. Actions that risk further instability will become harder to sustain. A 1970s world in which oil shocks lead to years of stagflation will no longer be a distant memory but a nearing reality.
China depends on Gulf energy to sustain growth. Russia benefits from higher and more volatile energy prices. Iran gains leverage from its position at the Hormuz choke point.
Each of these three nations has incentives that run counter to the economic stability of the United States and its allies. These three nations do not need to coordinate in a formal way. The structure of the system pushes them in the same direction. This is how a new order emerges — not through a formal alliance (at least not at first) but through converging incentives that reinforce one another over time.
Imagine Iran with control of about 20 percent of the world’s oil, Russia with about 11 percent and China able to soak up much of that supply. They would form a cartel to deny the West 30 percent of the world’s oil. You don’t need sophisticated analysis to recognize the catastrophic consequences: precipitously declining power for the United States and Europe, and a global shift toward China, Russia and Iran.
Source: The New York Times
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