Rana does a fair amount of deep research and knows his history, so the notes below are from a recent posting he made. He posts so he can look back a few yeasr from now to see how it went. Here is the talk , I hope it finds a home in our minds to consider. "Stop The Fear" ( BTW, he has often brought the stopping fear message across the country and when markets are choppy which actually is most of the time, it is a good reminder) TLR
The myth of the Strait of Hormuz closure.
Roughly 21 million barrels per day of oil and petroleum products normally transit the strait. That volume accounts for one fifth of global petroleum liquids consumption and one quarter of all seaborne traded oil.
Yet the destinations of those flows expose the asymmetry that ultimately doomed the strategy.
In the first half of 2025 ~89% percent of crude oil and condensate flowed eastward to Asian markets.
China absorbed 37.7 percent of the total followed by India at 14.7 percent South Korea at 12 percent Japan at 10.9 percent and other Asian buyers at 13.9 percent.
Europe received just 3.8 percent and the United States only 2.5 percent. The IRGC was never holding the West hostage. It holds the East.
By throttling traffic during the conflict the regime exercised its only economic "card". Ship transits collapsed to under ten percent of normal levels even after the ceasefire. Insurance rates soared and oil prices spiked.
80% (16.25M bpd) of the 20M barrels per day supply of the Strait of Hormuz has already been replaced or been rerouted.
7M: Saudi Reroute
4.25M: Pre-War Surplus
2M: China Safe-Passage
1.5M: UAE ADCOP reroute
1M: Iran Jask Bypass
400k: India Safe-PassageThe primary victims were Asian importers especially China and India. Those nations faced immediate cost spikes and supply uncertainty.
Beijing responded by drawing down its strategic petroleum reserve which covers more than four months of imports while accelerating purchases of Russian African and Latin American crude.India pursued parallel diversification.More critically Gulf producers gained the political urgency and capital they needed to lock in permanent bypass infrastructure.
Saudi Arabia ramped its East West Petroline to near its seven million barrels per day capacity routing crude to Red Sea terminals at Yanbu.The United Arab Emirates expanded the Abu Dhabi Crude Oil Pipeline to Fujairah on the Gulf of Oman. Additional overland proposals and expanded export terminals emerged almost immediately.Once those routes reach commercial scale the strait loses its status as a global chokepoint. It becomes a regional inconvenience whose disruption matters far less to the broader market.
Simultaneously United States crude exports have surged to a record 4.9 million barrels per day in April 2026 with forecasts pointing toward five million or higher in coming months. That volume covers roughly 23 percent of normal full Hormuz traffic and about one third of the crude and condensate segment.
Asian refiners have redirected demand toward US Gulf Coast barrels to fill the shortfall from Middle East shut ins estimated at 7.5 to 9.1 million barrels per day. The surge not only caps price spikes but also cements American producers as the flexible swing supplier to Asia.
Deficit? Only 3.8M bpd and even just 2 more tankers per day would reduce the deficit to 0.
With 1.3B and 500 millions barrels in combined reserves for China & India respectively, they have a 3-4 month reserves before they run into a deficit.
Opening the Strait of Hormuz has now merely turned into an afterthought.
The United States stands as the unambiguous winner across all horizons. Export revenues boom in the first year as shale producers respond to sustained high prices.
Over five and ten years America solidifies its role as the reliable Atlantic basin supplier to Asian demand. Strategic leverage deepens without proportional domestic pain.
Gulf states also gain by converting crisis into durable infrastructure and expanded market access.
In strategic terms the IRGC executed a classic use it or lose it blunder. By weaponizing the eastern hostage it compelled the very adaptations that render the hostage irrelevant. Global energy flows have begun a permanent eastward rerouting that favors flexible producers over vulnerable chokepoint holders.
The 2026 crisis therefore accelerates the long term isolation of Iran. It diminishes the regime's economic shield permanently and hastens the internal collapse dynamics already evident before the conflict.
What began as a tactical gambit to survive immediate pressure has instead locked in decades of strategic decline. The geography of oil trade the scale of United States export capacity and the self interest of Asian importers have combined to ensure that the IRGC traded its last "card" for time it didn't get and burned what it could not afford to waste relevance and economic potential to climb out of the grave it dug itself.
Wish the media would cover this
IRGC was never the end goal, China is.
Comments
Some Russia Ukraine thoughts and general market Fear Review from Rana, insightful and good reminders, opions are always interesting, Stop The Fear , ( some are fearful )