Comment by smallmancontrov
15 hours ago
The Ayatollah Booth is egg on the US's face regardless, but $2M/ship is about $1/barrel for perspective. Spot price is $95/barrel right now.
15 hours ago
The Ayatollah Booth is egg on the US's face regardless, but $2M/ship is about $1/barrel for perspective. Spot price is $95/barrel right now.
$2M/ship is $1/barrel for VLCCs, but it's a lot more for smaller ships. Practically, nobody will use a ship smaller than a VLCC with the toolbooth.
VLCCs are already 2/3 the oil traffic, but yeah, rough day to be a small ship with cheap cargo.
Israel is already breaking the ceasefire conditions. Ref: "Netanyahu: Ceasefire doesn’t cover Lebanon" https://www.timesofisrael.com/liveblog_entry/netanyahu-cease...
38 replies →
Perhaps they'll pro-rate it by size.
Maybe they'll end up with a sliding scale fee based on ship size/capacity
$2M/ship is $100B/year at pre-war crossing rates.
For reference: This would almost triple their govts funds each year. One must also not forget that they're able to raise tolls in the future, both for monetary investment but also for negotiation purposes.
good for them, hopfeully they will be able to better protect themseves from rogue nations that don't respect international laws.
So we spent a ton of money and a bunch of people died to negotiate a much worse situation.
5D chess!
5 replies →
Not quite, since they plan to share the revenue with Oman, or at least that’s what they’re currently claiming.
Trump cancelled the Iran deal, replaced it with nothing and now Iran has found an infinite money glitch.
Soon the dubai influencers will flock to Teheran.
Nice. I wonder what the costs of reparations would be if the ceasefire were to end the war?
I’m 99% sure that if there is a deal where Iran collects a toll, it’s going to involve counting that toll (and/or sanctions relief, and/or unfreezing Iranian assets) as reparations. I would be very surprised if the US or Israel ever agree to direct payments to the Iranian government.
100B/Year
How are they spinning this, that it is not Reparations?
"10. Iran to use Hormuz fees for reconstruction instead of reparations"
What is the splitting of hairs here?
I think reparations could be spent as they see fit. Reconstruction implies the money is going to exactly that.
But I agree it's a weird nitpick at this stage, as it seems almost impossible to verify once in place
2 replies →
Not convinced it will happen. What would prevent Saudi Arabia from retaliating and introducing a special fee on all ships coming from Iran. It's not like intercepting those massive cargo ships in a small sea is of any difficulty for a well funded military.
Geography and missiles? Iran have everything to lose and have been put in a position where they literally have to fight for their existence.
Militarily Iran is a giant and Saudi Arabia is a minnow.
Saudi Arabia has something like twice as many jet fighters than France. Even if you factor incompetence, it's not hard to hit a cargo ship or an oil production facility in absence of any meaningful air defence.
4 replies →
Isn't it already happening ?
Rather than $2M per ship, it's €1.7M or 13.7M CNY per ship.
1$/barrel - of barrels they are not producing surely ? That would make them able to levy Saudi Arabian and UAE oil and gas.
If Iran's 10 points become the basis of the peace, it ratifies Iran's sovereignty over the strait, at which point they can raise the price. It will be years before alternative routes devalue control of the strait, during which time Iran can siphon a lot of money out of passages taxes.
One thing I've not heard much discussion of is alternative routes. In the early days of this war there were discussions i of pipelines but it tapered off pretty fast
Pipelines are possible, but they take time to build. The pipeline would have to cross several countries (depending on what route is taken - look at a map) which makes it much harder. Will Oman even be interested in this? Saudi Arabia I guess could build a pipeline to the red sea entirely internally, every other country in the region would have to cross someone else.
Still if Iran does charge the $1/barrel of oil they are proposing expect the countries in the region to look into a pipeline. That is a lot of money and a pipeline could potentially be cheaper in the long run.
Pipelines are expensive and slow to build and notoriously vulnerable. Also you would need many I to match even half of the Hormuz throughput
[flagged]
Oil is a globally traded commodity so the US definitely does care. The US also does consume oil from the gulf.
That said this term is not going to be acceptable to anyone so it's likely not going to happen. It remains to be seen where we'll be after the two week ceasefire that Iran declared it would never accept (no ceasefire, only end of war). Iran certainly has some leverage but so does the US.
So we go and say "a whole civilization will die tonight".
They had to rapidly back off when they realized which civilization that was
I don't think you understand how commodity markets work, in particular oil, which is easy to ship relative to extraction costs.
It literally doesn't matter where the oil comes from, it only matters how much gets shipped! Only an utter fool could say something like "closing off the strait of Hormuz doesn't matter because our oil doesn't come from there." One merely has to look at current US gas prices to see how utterly silly that notion is!
> One merely has to look at current US gas prices to see how utterly silly that notion is!
We could probably slash gas prices by banning oil exports, thus removing domestic oil supply from global market pricing (barring smuggling). The oil industry would probably hate that, though, for obvious reasons.
Ultimately, though, this is yet another wakeup call for why an economy and society built around lighting a finite resource on fire is a bad idea, and hopefully this time around that wakeup call sticks.
1 reply →
California is more reliant on foreign oil. https://www.energy.ca.gov/data-reports/energy-almanac/califo...
And seems about 23% comes from the Middle East. https://www.energy.ca.gov/data-reports/energy-almanac/califo...
Gas prices going up across the country shows that all of the US is reliant on foreign oil, even if none of it ever touches the state.
The idea of counting "reliance" based on the exact shipping route that serves you today is nonsense.
1 reply →
Funny how the only people who believe that are the people who have been wearing the red hats for years now
[flagged]
7 replies →
yeah, that's why the biggest single problem facing Trump right now is the price of gas at US pumps, which is weird because based on your understanding of global trade it hasn't gone up at all...
Oil is a mostly liquid (pun intended) market.
[flagged]
> Gulf States themselves will go to war over it because they sure as hell aren’t paying Iran so that they can sell oil on the free market.
Is this not the war they're currently losing? the US is their military.
[flagged]
29 replies →
The war hasn't even started. What you have seen is the amuse-bouche. What you would see, if there was a real war going on, is the end of the iranian civilization.
This little school yard fight was just Trump trying to get a peace prize. He miscalculated, so as soon as things are back to normal, he will declare victory, ignore all facts to the contrary and go home.
As always I thank Trump for the amazing investment opportunities he is always creating! =)
5 replies →
Freedom of navigation is a core global principal
Like not attacking civilian infrastructure?
> Like not attacking civilian infrastructure?
No. I'd actually say freedom of navigation [1] is almost the definition of a Pax. It's precedented across millenia in a way prohibitions on total war are not.
Let me be clear, prohibitions on total war are good. But they're also a new concept and one clearly the world's powers don't agree on to one iota. Freedom of navigation, on the other hand, benefits everyone but autarkies, and has for, again, millenia.
[1] https://en.wikipedia.org/wiki/Freedom_of_navigation
20 replies →
Of the western world.
Armed robbery of unbelievers always has been a core tenant of the islamic world.
https://en.wikipedia.org/wiki/Barbary_Wars
One of the reasons they are dependent for economic survival on the us upholding some rule of law. And one of the reasons they stagnated in medieval times. Also ironical one of the driving reasons for western maritime exploration, to get around the endless taxing of trade.
4 replies →
[flagged]
Gulf states have no ability to go to war. As this war has shown, the states are entirely dependent on oil and desalination plants, both of which are easily attackable infrastructure.
> Freedom of navigation is a core global principal
And Iran has been respecting that principle for decades. So why exactly did the US and Israel (and GCC countries) think that the status quo would remain even if they keep antagonizing Iran? Imagine getting bombed during negotiations - not once, but twice in a single year! Their sovereignty was being disrespected, so now they're understandably establishing a new status quo.
And btw, if Iran and Oman cooperate, there is no threat to "freedom of navigation" under international law.
In a nutshell: play stupid games, win stupid prizes.
Moreover, USA has been the first who has stopped respecting the freedom of navigation, by implementing a blockade of Cuba and preventing the oil tankers to reach Cuba, already since February, before the Iran war.
USA does not respect any international law, but it demands from others to do this.
Iran has been keeping it open to avoid attacks. Their first order of business if they get nuclear weapons would be closing the strait and implementing a far more massive toll. They already have ICBM capable of hitting Europe. This isn't really America's problem though, the price of oil won't go parabolic, it will fracture. That's what the current price action is leaning towards. So cheaper oil in the Americas and vastly more expensive oil in Europe.
1 reply →
Iran has been funding and arming groups which threaten maritime security for a while now. They also have been obviously attempting a nuclear weapons program while saying if they achieve their aim that they will do crazy shit.
I guess the games you think are stupid depend immensely on your priors.
6 replies →
Oman isn’t the only country in the region, and any country should expect their ships to sail peacefully. Last I checked it’s the US and Israel at war with Iran, not others - no justification for charging transit fees.
Second, you’re ignoring decades of history and picking an arbitrary point to say that’s when some animosity started. Nobody forced Iran to build all these missiles and to try and build a nuclear weapon or kill their own people or fund actual terrorist groups as designated by the United States and European Union. If you drag out negotiations long enough you never get bombed! What a thought lol.
46 replies →
> Iran has been respecting that principle for decades
May 2022: two Greek Tankers seized by IRGC commandos
2023: Tankers Advnatage Sweet and Niovi seized by IRGC commandos
Jan 2024: St. Nikolas seized by Iranian Navy
Apr 2024: MSC Aries seized by IRGC commandos
During the Tanker War 1981 - 1988: Iran was responsible for approximately 168 attacks on merchant ships
July 1987: Kuwait tanker MV Bridgeton struck by Iranian mine April
1988: USS SAmuel B. Roberts nearly sunk by Iranian mine.
2019 Limpet Mine Attacks
July 2021: Iranian drone strike on MT Mercer Street
Nov 2022: Pacific Zircon struck by Iranian drone
2 replies →
> play stupid games, win stupid prizes.
Yeah, the game Iran is now trying to play is called “Pipelines and Pirates”.
There’s actually a ship deployed to the region right now named after the standard US response to this game, the USS Tripoli.[1]
[1] https://en.wikipedia.org/wiki/First_Barbary_War
6 replies →
[flagged]
31 replies →
> Imagine getting bombed during negotiations - not once, but twice in a single year!
All other problems with the Iran war aside, there's absolutely nothing unusual about this, this is standard. Countries that go to war with each other are almost always mid-negotiations. Usually negotiations of some level go on throughout a war as well.
1 reply →
> Freedom of navigation is a core global principal and Iran has no legitimate right to stop other countries from trade.
The US is stopping other countries from trading with Cuba and Iran. The US doesn’t have the “right” to do that, but it doesn’t need the “right”. It only needs power.
Iran has power over the Hormuz and is exerting it for what it deems is in its interest.
> Gulf States themselves will go to war over it
Maybe? But I doubt it - $1 per barrel amounts to like 1-2% of the price of oil. They may not like it but it’s not going to affect their bottom line nearly as much as closing the strait for 1 week will. A war with Iran would mean utter destruction of all oil infrastructure in the region, so probably better to pay 2% to avoid that.
If you want to argue from a power prospective then the US and Israel can just do whatever they want too and any moralistic argument seems easy to shelve. It cuts both ways.
The Gulf States aren’t going to pay a tax to Iran. It’s a matter of principle - can’t live as a hostage and this is the weakest that the Iranian regime has been in quite some time. Better to keep the straight closed and make it painful for everyone else too.
13 replies →
Closing the strait for 1 week is 1.9% of annual traffic if equally distributed, so it is very similar.
1 reply →
> Freedom of navigation is a core global principal
Unlike Bosporus & Suez (similar choke points in the region), there's no international arrangement for the Hormuz bottleneck, nor has Iran ratified UNCLOS ("Convention on the Law of the Sea").
hmm? Suez is a man-made facility, and it costs money to operate it
so... maybe we should go back to the pirate days yarrr?
1 reply →
[flagged]
18 replies →
> I wouldn’t worry about that lol. Gulf States themselves will go to war over it because they sure as hell aren’t paying Iran so that they can sell oil on the free market.
And yet they haven't gone to war (or joined in the war) to open up the SoH so far.
Their military capabilities aren’t that great and they’re scared most likely. Iran is the big neighborhood bully and stockpiled thousands of missiles. Better to let the US Navy and US Air Force take out Iran’s capabilities to limit destruction of their civilian facilities which Iran has threatened to blow up. But hey they can just round up civilians and put them next to the desalination plants like Iran did the bridges. You think that will stop the Iranians? ;)
And folks it has been just over a month. Give it time. The Gulf States are already placing orders for military equipment from countries like Ukraine - the one that has experience fighting drones that Russia buys from… you guessed it - Iran!
nobody will want to fight for Gulf monarchies, it is actually the opposite: population has a great incentive to overthrow the rich decadent UK-installed monarchies and redistribute oil revenues more fairly.
US was a guarantor of peace for monarchies, but seems like not anymore
[dead]
[flagged]
It doesn’t really bother the US specifically, it raises oil prices for everyone. The only difference is the US is the only that has a military that can actually do anything about it. We’re not going to let them charge ships like that nor would the Gulf States allow it - it’s existential. They expect to be able to trade products on the free market under safe seas like any other country. This is a core global principle. If the US walks away this failure falls on the global community for continuing to stand by and do nothing while these guys load up on missiles and try to build a nuclear weapon and then they can charge even more for the straight.
5 replies →
Trump will just spin it as a win by saying that ships are moving through the SoH again and not mentioning the Iran tollbooth. Most of his supporters won't question it.
There's not much of a real way to see what we say on this site because most of it gets flagged in violation of the rules.
2 replies →