Get ready for Trump's "warflation": higher prices for oil, gas, food

[bigtree]

Catherine Rampell @crampell 1h
Get ready for Trump's "warflation": higher prices for oil, gas, food (fertilizer passes through Hormuz), goods made with petrochemicals (umbrellas, shampoo, toys, etc.), and pretty much anything that needs to be transported anywhere. Affordability!

Trump’s “Warflation” Has Just Begun
If he were trying to increase prices on purpose, would he be doing anything differently?

___The top crude oil expert at S&P Global Energy warned that the military conflict has the potential to become “the largest oil supply disruption in history.” That’s because about a fifth of the world’s oil passes through the Strait of Hormuz, on Iran’s southern coast—or at least, it used to. Iran warned tankers and other commercial vessels not to transit the strait, and at least nine of them have now come under attack in the Gulf region. Shipping traffic through the strait has virtually stopped.

Trump has offered U.S. Navy escorts (and insurance) to vessels transiting the strait, but as my colleague Ben Parker explained, that’s not a feasible solution. We’re now seeing the fallout: Iraq, for instance, slashed oil production by nearly 1.5 million barrels a day because it’s unable to load tankers and is running out of storage. Refineries in Saudi Arabia, Kuwait, and Bahrain have slowed output or shut down entirely; one in Bahrain was reportedly hit by a drone strike today. Meanwhile, China has begun hoarding fuel.

Production of methanol and other chemicals has also been disrupted. Same with fertilizers used to grow the world’s food supply: Roughly 35 percent of global exports of urea (the most common nitrogen fertilizer) and 45 percent of global exports of sulfur (used to produce phosphate fertilizers) traversed the Strait of Hormuz. Fertilizer prices are already spiking, and American farmers are freaking out. Consumers may see “higher prices for bread within six to 10 weeks, eggs within a few months and pork and broiler chicken within six months,” according to an estimate from food-system expert Raj Patel.

And then there are the gazillions of consumer goods that people may not realize use petrochemicals as inputs. Those include clothes, iPhones, candy, dentures, dishwashing liquid, footballs, shampoo, toothpaste, lipstick, plastic toys, trash bags, umbrellas, tires—you name it. These products won’t immediately get more expensive, but we should anticipate that the chemicals that go into these products will start to get costlier if the war continues for a month or two, per Seth Goldstein, a senior equity analyst who covers chemicals for Morningstar.

Higher fuel prices also feed into higher prices for virtually all other goods...

read more: https://www.thebulwark.com/p/trump-iran-warflation-has-just-begun?triedRedirect=true&_src_ref=t.co

[bucolic_frolic]

1. It's 1973 all over again

Guns and butter, war, currency devaluation, inflation, stagflation, pollution. Nixon would be proud!

[ProudMNDemocrat]

2. Once again...FUCK YOU Trump Voters!

YOU VOTED FOR THIS!!

Happy now? So much WINNING!

[dalton99a]

3. And more layoffs.