I know some of you might not want to hear this. To be fair..I could be wrong.
The Petro Dollar might be strengthened or at least maintained by continuing this war with Iran.
Let me explain:
Yes…Iran now has the Strait of Hormuz. 20-25% of the World’s oil passes through there. However, America is still the largest energy producer both in terms of oil and natural gas.
If the oil infrastructures of Iran and the Gulf states are seriously damaged or destroyed over the next two-three years, where does that leave the rest of the world for oil supply? It’s going to take at least a decade to move everyone over to EVs and solar.
Unfortunately (and I really hope I’m wrong) this war could drag on for years or even decades. A ship here…an oil well there… this desalination plant and then another one. It doesn’t have to fall apart all at once to reduce global supply in a way that benefits America.
Even though the US bases are getting smashed, many of the personnel have been evacuated and are working from more distant locations. The US can’t touch Iran as easily but that doesn’t mean the war is over. The entire Middle East could be taken off line and America will still be ok.
Sure..we will have 5 dollar a gallon gas but so what? Remote work could easily make a come back just as it is in SE Asia. Tesla is starting to roll out their electric robotaxis back in my home state of Texas. We feel the pain but we aren’t dying.
The United States and Russia would be the only major oil producers in this new environment.(Venezuela is basically in a hostage situation.)
Do you really think that America will sell its precious dinosaur juice in Petro Yuan? Of course not. The Dollar would still have a lot of power in this new environment even it gets somewhat weakened initially.
America could lose this war with Iran and still come out ahead or at least even. We lost in Vietnam but Hanoi and Saigon have McDonald’s and Starbucks everywhere.
Maybe that’s why Trump said he’s considering letting go of Hormuz and calling it a win.
What does this mean for SE Asia? It means that electrification is no longer just about air quality improvement. Switching to EVs is now an issue of national security. Most SE Asian governments already know this.
The question is: how fast can they make the transition?
