The Strait of Hormuz is still so incredibly closed. The political jawboning cannot warp reality. There is no meaningful traffic through the Strait of Hormuz. That means that 20% of the world’s oil is still not flowing from producers to purchasers. The knock-on effects of this situation, even if it were resolved tomorrow, will likely be on a larger magnitude than the horrendous supply chain snarls experienced in the COVID era. Probably not in the US, but globally, people are going to starve to death due to a massive food shortage. The North American growing season is already underway, and a massive portion of the fertilizer market flows from or somehow relies on the Strait of Hormuz. The likelihood for double digit push-based inflation from fuel prices and other knock-on effects later this year is not priced in.

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