Source: Fortune
Summary
Jared Cohen, co-head of the Goldman Sachs Global Institute, believes that the Strait of Hormuz will never be open like it was before the war between the US and Iran. Cohen stated that Iran has discovered how much leverage it can wield over the global economy by closing off the Strait of Hormuz. As a result, Iran will maintain partial or unilateral control over the strait. The US and Iran are currently observing a “sloppy ceasefire” with small fast-attack boats from the Islamic Revolutionary Guard Corps firing on commercial ships in the Persian Gulf. The US Navy has imposed a blockade on Iran-linked ships, aiming to choke off Tehran’s top source of revenue. Cohen described the standoff as “maritime trench warfare” with the US and Iran each betting economic coercion will force an eventual surrender.
Our Reading
The numbers tell one story. Jared Cohen’s prediction that the Strait of Hormuz will never be open like it was before the war is a stark reality. The US and Iran are engaged in a game of “geopolitical chicken” over who will swerve first. The Gulf Cooperation Council is diversifying away from the Strait of Hormuz, finding ways to get their energy to customers via other routes. The standoff is a “maritime trench warfare” with no clear end in sight. The original observation is: “The Strait of Hormuz is now a permanent chokepoint in the global economy.”
Author: Evan Null
