Total Shutdown

Hi, welcome back to the channel. In today's episode I want to talk to you about the latest developments in the war in Iran and specifically the news that the United States is now starting a blockade of the Strait of Hormuz, which means that there will be virtually no traffic moving through that waterway in the near future. But before we get into all of that could I ask anybody that hasn't subscribed yet to please hit that subscribe button, really helps with the algorithm and of course puts a smile on my face. Now this is a really important update because what we've seen over the past 24 hours is a significant escalation in the situation. Following the breakdown of talks Donald Trump posted on Truth Social confirming that a US-led blockade targeting Iranian oil exports would begin on Monday the 13th of April. The intention behind this move is very clear, it's designed to cut off Iran's main source of income by stopping the flow of oil and gas out of the country. And in simple terms the strategy here is economic strangulation. If you remove Iran's ability to export energy you remove the bulk of its revenue and the thinking is that eventually that pressure forces Iran back to the negotiating table or potentially forces some type of capitulation, so basically they surrender. However whilst that may be the objective the reality is that this move dramatically increases the risk of a much wider conflict because the Strait of Hormuz is not just any shipping lane, it's one of the most important choke points in the global economy. Roughly 20% of the world's oil supply flows through that narrow stretch of water every single day. So when you start talking about blockades, restrictions and military enforcement in the region, you're not just impacting on Iran and its income, you're impacting on the entire global energy system and the markets have reacted immediately. We've already seen oil prices surge back above $100 per barrel, that's a really important psychological and economic level because this isn't being driven by strong global demand, this isn't a sign of the global economy expanding, this is being driven by fear. Fear of disruption, fear of shortages and fear of escalation. Now if we have a look at what's been happening with Brent This is a graph for anybody that sent me messages recently saying why aren't you including any graphs anymore, well here's one to keep you happy. What you'll see is that the current price is now at its highest level since mid-2022 which was immediately after the invasion of Ukraine started when the global economy was thrown into disarray because Russia was one of the biggest oil exporters and nobody really knew what was going to happen with the future of Russian oil. If we extend this chart out to show what's been happening over the past 10 years you'll see that outside of that Ukraine spike we are now at some of the highest levels that have been seen at any time over the last decade and that tells you everything you need to know about how serious this situation is becoming because normally oil prices act as a barometer of the global economy. When the economy is strong demand for oil increases and prices go up. When the economy is weak demand falls and prices go down but what we're seeing right now is the opposite of that normal relationship. Prices are rising not because of strong global demand but because of constrained supply and that's a really dangerous combination because it means that higher costs without the benefit of economic growth mean that everything's going to slow down. It's effectively a tax on the global economy. Every business that relies on transport, manufacturing, logistics or energy is now facing higher costs that's basically every business. Airlines, shipping companies, logistics firms all of them are going to be hit directly and ultimately those costs get passed on to consumers which means higher inflation, higher fuel prices, higher food prices and less disposable income. Now at the same time financial markets are already starting to react to this uncertainty. We've seen equity markets falling, increased volatility and a shift towards safe haven assets because investors just don't like uncertainty and right now there is a huge amount of uncertainty. Now let's talk about the geopolitical side of this because this is where things start to get even more concerning. Iran has already responded that warning that it will target other Gulf State ports if the U.S. goes ahead with this blockade and have also been threats made against U.S. naval vessels involved in that blockade itself. Now if that happens if Iran starts attacking ships or military assets with drones or missiles then this situation escalates really quickly because at that point you're no longer talking about economic pressure you're talking about direct military confrontation and that could draw the U.S. back into active conflict which then raises the possibility of further strikes on Iranian infrastructure and potentially escalation beyond that with Iran then targeting infrastructure in the region in other countries oil and gas infrastructure and once you get into that kind of cycle it becomes very difficult to control. Now another really important development here is the international response. The UK has already indicated that it will not support a blockade of the Strait of Hormuz and that highlights the fact that there is not universal agreement amongst western allies on how to handle this situation which adds another layer of complexity because without coordinated action enforcement becomes more difficult and the risk of fragmentation increases. We've already seen Donald Trump saying that he's reconsidering whether or not the USA should remain in NATO due to the lack of support that he believes some of the NATO countries have provided to the USA so far. Now in terms of the global economic outlook this is clearly bad news. We were already in a very fragile position going into 2026, growth was slowing, inflation was still elevated in many parts of the world and central banks were only just starting to consider easing the monetary policies. This situation now complicates all of that because rising oil prices feed directly into inflation and if inflation starts rising again central banks may be forced to keep interest rates higher for longer which then puts further pressure on consumers and businesses. So instead of moving towards recovery we could be looking at renewed economic slowdown. Now on top of that there's also the physical damage that's already been done. Infrastructure has been hit in the Middle East, supply chains have been disrupted, shipping routes have been altered, insurance costs for vessels operating in the region have surged and all of these factors add friction to the global economy which again reduces efficiency and increases costs. So when you step back and look at the bigger picture what you're seeing is a combination of economic, financial and geopolitical pressures all coming together at the same time. That's why I said at the beginning of today's video that we're now at a really important inflection point because the decisions made over the next few days and weeks are going to have a significant impact on how this situation develops. If there is de-escalation, if negotiations resume and then some of this pressure could ease, oil prices will start to stabilize, markets should recover but if the situation escalates further, if the blockade is enforced aggressively, if there are attacks, if there is retaliation, then we could be looking at a much more serious crisis and that could have lasting consequences for the global economy not just in the short term but throughout the rest of 2026 and potentially beyond that. Now just to be balanced there are some arguments in favour of this strategy. Supporters would say that applying maximum economic pressure is the fastest way to force a resolution upon Iran, that by cutting off revenue you limit Iran's ability to fund military activity and prolong the conflict and in theory that could lead to a quicker end to this conflict. However, the risk is that instead of forcing a resolution it triggers escalation and history has shown that economic pressure doesn't always lead to a compliance, sometimes it leads to resistance and sometimes it leads to conflict. So this is a high risk strategy being operated by the USA and the stakes are incredibly high because of the importance of the Straight of the Moose to the global economy. So the overall summary of today's video is that what we've seen over the last 24 hours is a major escalation. The announcement of a US-led blockade targeting Iranian exports, a sharp rise in oil prices back above $100 per barrel, increased volatility in financial markets and a heightened risk of military confrontation all of which points to a much more uncertain and potentially more dangerous phase of this conflict and from an economic perspective this is clearly negative. Higher costs, higher inflation, lower growth and increased uncertainty which is not a good combination. So I'll keep you posted on any further news and developments as and when they occur. Hopefully you found today's video useful, informative and most importantly thought-provoking. If you've liked what I've said or maybe you didn't like it but you thought it was interesting then please give me a thumbs up. Please subscribe to the channel if you haven't done so already. Don't forget I'm currently running my competition where you can win my property or a cash alternative prize. 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