The Rabid Capitalist

Professor Glenn A. Okun

Iran has taken responsibility for seizing the St. Nikolas, an American oil tanker off the coast of Oman, raising the risk of a military conflict in the Strait of Hormuz.  Iran’s Tasnim News Agency reported that its naval forces captured the vessel as a result of a court order.

While Iran has claimed that it does not want to see the Israel-Hamas war expand into a regional conflict, its actions and the terrorist acts of its proxies, Hamas, Hezbollah and the Houthis, ratchet up the risk of this consequence.  Crude oil prices have increased two percent this morning in response to this event.

Iran’s provocation is disconcerting.  This escalation in the Middle East war expands the naval conflict zone from the Red Sea to Persian Gulf.  The threat to global energy and supply chains increases inflationary pressure and endangers the soft landing.