Conflict between Israel and Iran would ‘most certainly’ close the Strait of Hormuz: Oil price could increase to $200, $700 or $1’000 per barrel

An article published by Lloyd’s a day before the Israel strike on Iran is analyzing the consequences of a most likely closure of the Straits of Hormuz.

Lloyd’s reports that “the US has begun the evacuation of some personnel from the region, including dependents in Bahrain and some staff at its embassy in Baghdad”, days before the attack on Iran.

Indeed interesting to read that already the days before the strike, US personnel and families have been moved out of the area, eg out of Bahrain and Bagdad and that White House spokesperson Anna Kelly said the decision was made as part of a regular review of American personnel abroad, as reported by Lloyd’s.

Any clash between Israel and Iran “would be of the greatest concern to shipping in the Middle East Gulf and adjacent waters”, Lloyd’s reports.

“A full-blown armed conflict between Israel/the US and Iran would most certainly effectively close the Strait of Hormuz at least for a period of time and drive up oil prices.” Shipping in near regions may be affected as well.

Specialists from around the World report that “if the Straits of Hormuz are shut down the price of oil will go to $700 or even $1’000 a barrel, crashing the World economy. In a historic comparison, this Middle Eastern War would be the equivalent to the collapse of the Kreditanstalt of Baron Louis de Rothschild of Vienna that crashed the European economy in 1931 driving German unemployment in 1933 to 50%. The United States avoided revolution as its 1933 unemployment rose only to 25% in 1933. We would anticipate this time around a 50% unemployment in the United States.” (Source, Israel intelligence)

Very much possible that the economic consequences of the latest Covid crisis will be felt as a long weekend closure compared what the blockage of the Straits of Hormuz may have as consequences on the World economy.