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“Global stock markets tumble as Trump bid to avert oil crisis in strait of Hormuz fails to reassure…
“Trump sought to mitigate fears of long-term disruption to the global oil market on Tuesday, suggesting that the US military stood ready to protect ships moving through the strait, and political risk insurance “at a very reasonable price” to vessels navigating the Gulf.”
https://www.theguardian.com/business/2026/mar/04/stock-market-fall-trump-hormuz-oil-prices
“Middle East conflict poses fresh test to central banks as oil shock fuels inflation.
“A widening Middle East conflict has posed a fresh test for global central banks, as fears of an oil shock and renewed inflation risks complicate policymakers’ calculus for shoring up growth.”
“The war between Iran, Israel, and the United States has severely disrupted the global physical trade of gold and silver.
“Mass flight cancellations and airspace closures in the Middle East—particularly around the major bullion hub of Dubai—have effectively stranded physical shipments of precious metals.”
https://www.ft.com/content/96b41e64-5a34-477f-ab03-d2da7a3a443e
“Global food insecurity risk looms amid Hormuz disruption.
“Trade Finance Global (TFG) heard from trade credit insurers at Coface. “The region is one of the main producers for fetilisers, especially of nitrogen. We have tried to identify where we can see the most risk,” said Bruno Fernandes, Head of Macroeconomic Research at Coface.
https://www.tradefinanceglobal.com/posts/global-food-insecurity-risk-looms-amid-hormuz-disruption/
“US shale bosses warn they cannot replace war-hit Middle East oil.
“US shale drillers cannot increase production quickly enough to solve an oil supply crisis caused by Donald Trump’s war in Iran, industry bosses have warned, saying a big rise in output would take months to materialise.”
https://www.ft.com/content/7af02521-2861-4299-962d-5f731ed0a0ad
“Britain’s vulnerability to the Gulf exposed as energy crisis unfolds…
“Not only does it highlight a continued reliance on precarious imports, but it also raises fresh questions over the UK’s lack of gas storage and Labour’s retreat from the North Sea… Even though the UK receives hardly any of its LNG from Qatar, there is the inevitable knock-on impact from the country’s role in the global energy trade.”
https://www.telegraph.co.uk/business/2026/03/04/britains-vulnerability-gulf-exposed-energy-crisis/
“Brussels urges calm as Iran crisis sends European gas prices soaring…
“European gas reserves are currently at just 30 per cent, a level the Commission said is “safe” as the European heating season draws to a close. But some countries are in a worrying position: Dutch supplies are languishing at just over 10 per cent.”
https://www.ft.com/content/950d45d8-5965-4deb-9a59-dd96721f09e2
“Trump says he’s cutting all trade with Spain for refusing his Iran war request…
“Spain called the U.S.-Israeli attack on Iran an “unjustified and dangerous military intervention,” and Spanish Foreign Minister Jose Manuel Albares said Spain would not allow its bases to be used for an operation that was not covered by its agreement with the U.S…”
“Merz Says EU Won’t Accept US Trade Deal on Worse Tariff Terms…
““A limit has been reached of what we are willing to accept, what we can accept with regard to this disproportionate burden with tariffs,” Merz told reporters after his meeting with Trump.”
“Norway ready to start nuclear weapons talks with France…
“Oslo’s willingness to start talks is yet another example of how European countries are shifting their security strategies in the wake of Russia’s attack on Ukraine and worries about relying on the U.S. following Donald Trump’s reelection.”
https://www.politico.eu/article/norway-ready-to-start-nuclear-talks-with-france/
“Poland Will Eventually Seek Its Own Nuclear Weapons, Tusk Says…
““Poland takes nuclear security very seriously,” the prime minister said ahead of a weekly government meeting on Tuesday. “As our autonomous capabilities grow, we will strive to prepare Poland for the most autonomous actions possible in this matter in the future.””
“Russian central bank challenges indefinite asset freeze before EU court…
“In its action before the court, the Russian central bank argues that the regulation breaches the right to effective judicial protection, the right to property and the principle of sovereign immunity of states and their central banks.”
“Sanctioned Russian LNG Tanker Explodes in Mediterranean…
“The vessel, identified as the Arctic Metagaz, was reportedly destroyed around 4 a.m. local time between Malta and Libya. Multiple sources cited by the Times of Malta said a series of explosions occurred before the crew was rescued and transferred to another vessel in the area.”
“Middle East conflict offers economic lifeline to Russia’s flagging war machine…
““When a good fifth of global oil supply and roughly a quarter of seaborne trade is effectively locked up, that’s a boon for Russia,” said Sergey Vakulenko, a senior fellow at Carnegie Russia Eurasia Centre and leading expert on Russia’s energy sector.”
“China’s factory activity contracts for a second month…
“December’s manufacturing PMI reading of 50.1 broke China’s eight consecutive months of contraction, but its recent return to negative territory signals more weakness in manufacturing especially under sluggish domestic consumption and demand.”
https://www.independent.co.uk/news/china-pmi-hong-kong-donald-trump-xi-jinping-b2931476.html
“Chinese consumers scout lower prices, secondhand goods as spending sputters…
“”Everyone is feeling the pinch financially, so everyone is looking for cheaper stuff,” said Liu, a 42-year-old secondhand book buyer visiting the Shanghai store. A longstanding taboo in Chinese culture against used goods, seen as unclean or a shameful sign of poverty, is lifting rapidly.”
https://uk.finance.yahoo.com/news/chinese-consumers-scout-lower-prices-023356723.html
“Six Charts That Explain China’s Weakening Economy…
“The slowdown reflects deep-seated forces – weak consumption, a prolonged property slump and a shrinking workforce, among them – that are reshaping what the world’s second-largest economy can realistically achieve. China’s sheer size is part of the story too…”
“South Korea’s stock market has suffered one of the steepest falls in history amid the widening fallout of the United States-Israeli war on Iran.
“The benchmark KOSPI index plummeted as much as 12.2 percent on Wednesday, eclipsing the 12.02 percent single-day plunge triggered by the September 11, 2001 attacks on the US and the 9.44 percent drop seen at the height of the 2008 financial crisis.”
https://www.aljazeera.com/economy/2026/3/4/south-koreas-stock-market-in-meltdown-amid-us-iran-war
“Korean won drops below 1,500 per dollar for first time since 2009 financial crisis.
“The Korean won fell past the 1,500 mark against the U.S. dollar early Wednesday for the first time since March 2009 during the global financial crisis, as escalating military clashes involving the U.S., Israel and Iran sent investors rushing to the dollar.”
“Frozen Frontier: Delays, Diplomacy and the Risk of a Permanent Cambodia–Thailand Standoff…
“At its core, the dispute is about overlapping territorial claims. But it has grown into something larger — tied to domestic politics, national pride, and regional power dynamics.”
“India Rupee Hits Record Low as Oil Rise Sparks Regional Meltdown.
“India’s rupee fell to a record low, while stocks and bonds declined amid concerns that rising crude prices, driven by the escalating conflict in the Middle East, fanned worries over inflation and the country’s widening trade deficit.”
“Kashmir on edge after Khamenei’s death: Strict curbs remain in place as protests continue.
“Strict restrictions remain in place across several areas, particularly those with large Shia populations, while mobile internet speeds continue to be throttled. The government has also ordered the closure of educational institutions…”
“Russian report highlights ongoing terror threats in Afghanistan, challenges Taliban control…
“Addressing a press conference in Moscow, Andrey Serdyukov said the continued presence and activities of extremist and terrorist groups in Afghanistan pose a direct threat to regional security and risk spreading instability to neighboring countries.”
https://www.jpost.com/international/article-888744
“Intense fighting continues between Pakistan and Afghanistan…
“The latest claim about the killing of Afghan forces was made the day after Pakistani President Asif Ali Zardari defended the ongoing strikes in Afghanistan, saying Islamabad had tried all forms of diplomacy before targeting militants operating from Afghan territory.”
https://morningstaronline.co.uk/article/intense-fighting-continues-between-pakistan-and-afghanistan
“Iran’s poultry sector faces cannibalism, currency collapse and feed shortages.
“Left without adequate feed, poultry at several farms in Iran have reportedly begun attacking and eating each other, as a deepening economic crisis pushes the country’s long-troubled poultry sector to the brink.”
“US troops told Iran war is ‘God’s plan’ to trigger Armageddon, watchdog says.
“More than 200 complaints allege military commanders framed US strikes on Iran as part of a biblical prophecy, invoking the Book of Revelation and describing Trump as divinely ‘anointed’, according to the Military Religious Freedom Foundation.”
https://www.trtworld.com/article/d2966767ea3f
“The Iran war’s troubling missile math.
“Four days into war with Iran, at least one of the United States’ Gulf allies is already running low on crucial interceptor munitions used to defend against Iranian missile and drone attacks, two sources told CNN.”
https://edition.cnn.com/2026/03/04/politics/missiles-weapons-stockpile-iran-us-war
“Israel vows to assassinate Iran’s new leader: Dubai under assault again, CIA station hit as Tehran’s new Khameini’s son rains missiles and drones on Middle East…
“Iran carried out retaliatory attacks on Middle East Gulf states, targeting US bases including a CIA station at the US Embassy in Saudi Arabia, while the US Consulate in Dubai was also rocked by a drone strike.”
“‘All red lines have been crossed’: Gulf states weigh response to Iranian strikes…
“Tehran’s strategy could backfire. Iran risks pushing Gulf states closer to Washington, even having them join the war effort in some form. So far, they’ve refused to let the US use their skies and territory to launch strikes on Iran. That could change [though] some would be reluctant to appear to be taking Israel’s side in the conflict.”
https://www.bbc.co.uk/news/articles/cjrqqd8lw2wo
“Israeli troops enter Lebanon forcing thousands to flee homes as Middle East crisis escalates…
“Residents of more than 80 Lebanese villages were ordered to evacuate by the Israeli military, as it launched major airstrikes against Beirut, reducing large buildings to rubble and expanding its targets beyond Iran.”
“Syria deploys thousands of troops to border with Lebanon, officials say…
“The Syrian officers said the Syrian reinforcement operation began in February but sped up in recent days. The Syrian and Lebanese armed forces did not immediately respond to requests for comment… The reinforcements include infantry units, armored vehicles and short-range Grad and Katyusha rocket launchers.”
https://www.timesofisrael.com/syria-sends-thousands-of-troops-to-border-with-lebanon-officials-say/
“‘We’ll run out of food this week’: Israel’s Iran war brings new Gaza siege.
“Israel closed all crossings into Gaza indefinitely when it attacked Iran, imposing a siege that has already pushed up food prices and threatens to plunge 2 million people into a new hunger crisis… One international food security expert said there was just a week’s supply of fresh food in Gaza.”
https://www.theguardian.com/world/2026/mar/02/iran-attacks-gaza-under-siege
“Tensions Bubble Along Eritrea-Ethiopia Border.
“Locals in Ethiopia’s embattled Tigray region say Eritrean troops have entered border areas, raising concerns about a return to war. Infiltrations come amid a feud between the countries over Red Sea access and Asmara’s alleged support of the Tigray People’s Liberation Front the region’s ruling party.”
https://adf-magazine.com/2026/03/tensions-bubble-along-eritrea-ethiopia-border/
“South Sudan risks return to full-blown civil war as violence escalates.
“South Sudan is reeling from an escalating conflict between the government-aligned army and opposition forces and allied groups that observers say risks returning the country to a full-blown civil war.”
https://www.theguardian.com/world/2026/mar/03/south-sudan-risks-return-civil-war-violence-escalates
“Cameroon’s decade of conflict leaves apes and conservationists in peril…
“Across the conflict zone, strict lockdown orders, referred to as “ghost towns,” fuel the information blackout. Using threats of bombings, assassination and other forms of violence, militias coerce residents, including conservation workers, to stay at home or risk being killed…”
“Terror Groups Pressure Sahel Capitals.
“Through attacks on airports, fuel blockades and IED threats, extremists challenge authority of junta-led governments… Deteriorating conditions across the AES countries stand in stark contrast to claims from all three junta leaders that they would bring terrorists to heel in a way that their democratic predecessors could not.”
https://adf-magazine.com/2026/03/terror-groups-pressure-sahel-capitals/
“West African nations have agreed to activate a regional standby force to combat waves of violence by cross-border armed groups in the region…
“The ECOWAS bloc held the meeting at a time when the region faces what experts said is an “existential security threat” that has seen thousands of people killed and hundreds of thousands displaced.”
“Cuba leaders’ days ‘are numbered’, warns Republican senator after Iran strikes…
“Lindsey Graham, Republican senator for South Carolina and an ally of President Donald Trump, hinted that the Communist regime in Havana could be targeted next by the US… “They’re going to fall. This communist dictatorship in Cuba, their days are numbered.””
“US military launches joint operation with Ecuador against terrorist groups in South American country.
“The United States military has launched a joint operation with Ecuador aimed at targeting terrorist organizations inside the South American nation, marking a significant new phase in security cooperation between the two countries.”
https://www.dailymail.co.uk/news/article-15612227/US-military-Ecuador-terrorist-groups.html
“Natural Gas Crisis Hits Peru Businesses as Rationing Starts…
“Peru’s main natural gas fields have stopped shipping fuel just as global prices are spiking due to the war in the Persian gulf, hitting national industries that depend on cheap power.”
“Lending troubles at Blue Owl Capital and other so-called private credit behemoths are setting off fears of a “bank run,” as one hedge fund put it…
“Now Wall Street is engaged in a grim guessing game as just about everyone… speculates about who might be forced to the market next, and at what prices. The conflict in Iran could only complicate the calculus.”
https://www.nytimes.com/2026/03/03/business/private-credit-crisis-blue-owl-capital.html
“The world’s biggest “shadow bank” fund has been hit by a record sell-off amid fears about the impact of AI on companies backed by private loans.
“Blackstone’s private credit fund, known as Bcred, saw investors pull $3.8bn (£2.9bn) in the last quarter – equivalent to 7.9pc of its total shares.”
“Tech firms and AI farming tools ‘playing with the food system’, warns thinktank…
“Farmers are at risk of being locked into a globalised system where, instead of growing locally adapted crops they have cultivated for generations, they are forced to buy seeds manufactured by industrial companies that come bundled with machinery and chemical inputs from other parts of the world…”
“Global economy must stop pandering to ‘frivolous desires of ultra-rich’, says UN expert…
“Olivier De Schutter, the UN special rapporteur on extreme poverty and human rights, says politicians must stop prioritising “socially and ecologically destructive growth” that only increases the profits – and serves the consumption demands – of the world’s richest individuals and corporations.”
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You can read the previous “Economic” thread here. Panopticon hopes to be back tomorrow with a “Climate” thread.
Quark’s latest, South Korea, copper, etc:
Although American stock markets have held up with hardly any declines in the first two days of trading after the attack on Iran, some stock markets, such as South Korea’s, have suffered a collapse.
The Korean Kospi has plummeted 20% in just two days.
Declines of between 5-7% have been common throughout the world.
Diesel in London has risen by almost 50% in three days.
The price of TTF gas for Europe doubled yesterday (intraday), in just two days.
They can no longer “find” a price for urea.
As you can see in these charts, we’ve barely started the third day of trading in the markets and we’re already seeing dramatic situations of price increases or decreases in some stock exchanges.
Yesterday afternoon, in a desperate attempt to curb oil prices, Trump announced a seemingly reassuring measure to reopen the passage through the Strait of Hormuz.
“A few moments ago, President Trump announced that the United States will provide insurance for “ALL maritime trade” through the U.S. Development Finance Corporation (DFC), and will provide Navy escorts, “if necessary.”
Effective immediately, I have directed the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, insurance and guarantees against political risks for the financial security of all maritime trade, especially energy trade, transiting the Gulf. This insurance will be available to all shipping lines. If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz as soon as possible.
Immediately, oil prices plummeted, only to return to their previous levels within a few hours.
The measure is complex and difficult to implement and would endanger the US Navy itself. Furthermore, it could take days or weeks to have full effect, if it even manages to cross the strait.
The world has never truly grasped the meaning of oil scarcity until it has experienced it firsthand. The only similar precedent was in the 1970s, which triggered a severe crisis with soaring inflation and interest rates. This time, it would be infinitely worse because the debts are so vast that rising interest rates would cause an almost instantaneous collapse of the global economy.
The conflict cannot drag on for more than a month, because the consequences would likely be irreversible. Trump faces a difficult situation because the Iranians have quickly identified his weak point (oil prices) and have decided to strike where it hurts most.
On the other hand, in the US, private credit is suffering its own crisis , dragging regional banks down with it.
“ The private credit crisis continues to worsen, as we already suspected. As I have tried to maintain in the debate, while in recent days all eyes have understandably focused on the escalating conflict with Iran and its repercussions in the energy and stock market sectors, this geopolitical noise has overshadowed the financial fractures developing in the credit markets.”
Yesterday it was reported that Blackstone is facing record withdrawal requests from its main private credit vehicle, the Blackstone Private Credit Fund, according to Bloomberg .
Investors attempted to redeem 7.9% of the fund’s shares in the last quarter—the largest redemption wave in its history —for a total of approximately $3.8 billion. The fund, which holds about $82 billion in assets, including leverage, typically limits quarterly redemptions to 5%, highlighting how unusual the surge in withdrawals has become .
In contrast to oil dependency, proponents of the energy transition ignore what is happening in the copper market, even though the reports come from the IEA itself.
Copper hasn’t skyrocketed, it’s in the stratosphere.
IEA anticipates a 30% supply deficit by 2035.
“ Copper, a highly conductive and corrosion-resistant metal, is fundamental to a more electrified energy system. As the world enters the Age of Electricity, strong growth in copper demand is anticipated from diverse sources, including power grids, electric vehicles, construction, industry, and data centers. However, despite the robust demand growth outlook, significant challenges remain in increasing copper supply. Based on the current project pipeline, the IEA anticipates that the copper market could face a 30% supply shortfall by 2035. ”
The challenges surrounding the development of new copper supplies are driven by declining copper ore grades (the global average copper mine grade has fallen by 40% since 1991 ), rising capital costs, and increasing project complexity. The average capital intensity for expanding existing (brownfield) projects has also increased by 65% since 2020, approaching the levels typically associated with new greenfield projects. These challenges are compounded by a rapidly declining rate of new resource discoveries. Of all copper deposits discovered in the last 35 years, only 5% have been discovered in the last decade . Finally, lead times for new copper projects are long (around 17 years from discovery to production), and many major projects have recently experienced significant delays and cost overruns . These dynamics suggest a structurally tighter market for copper concentrate (raw material for smelters), increasing risks to security of supply and underscoring the need for supply- and demand-side measures, from stimulating investment in new mines to advancing efficiency, substitution, and recycling of materials .
This is bad enough, but now it gets worse.
Copper smelting rates have plummeted.
“ Despite record copper prices, the intermediate copper market faces significant challenges. Smelter fees for processing copper concentrate, known as treatment and refining charges (TC/RC), have reached historic lows. The annual benchmark TC/RC index, based on an agreement between Chilean miner Antofagasta and major Chinese smelters, was set at USD 0 per tonne in January 2026, the lowest level ever agreed upon in annual negotiations. Meanwhile, spot TC/RCs have been negative since 2024 and have fallen to historic lows. This dynamic has been driven by a surge in China’s smelter capacity, which has significantly outpaced growth in copper concentrate production. As a result, competition among smelters for concentrate has intensified, considerably impacting smelter fees. Since 2005, China has accounted for over 90% of the growth in global copper smelting production, increasing its share from around 15% to half of global supply in 2025. ”
What does this mean?
There’s a lot of smelting due to Chinese growth and a low supply of concentrate, so smelters are fighting for concentrate, driving down the prices they charge mining companies. So much so, that refineries are even paying to get their hands on concentrate.
Naturally, this creates a problem. They won’t last long, and logically, those with an advantage (like China) will withstand the crisis much better than the others.
“ Foundries in China generally benefit from lower capital and operating costs than those outside China, reflecting lower labor and construction costs, greater economies of scale, and newer foundries with greater energy efficiency, higher throughput, and lower maintenance and renovation costs. Most Chinese foundries are state-owned enterprises, some of which may also benefit from government support during periods of low TC/RC revenues. In addition, some facilities operate with physical production targets rather than economic targets . These factors make major Chinese foundries more competitive and generally more resilient to periods of depressed TC/RC than many custom-built foundries outside China .”
The expected result is that refining in China will continue to increase its global share, forcing the rest of the world to depend on copper refined in China.
“ If the low TC/RC level persists and by-product prices fall, many custom smelters outside of China could face significant economic challenges. Should these conditions materialize, the copper market could follow a pattern observed in other critical minerals: oversupply drives down prices, making production outside the dominant supplier uneconomical, which in turn results in downsizing or rationalization and ultimately increases market concentration for the dominant operator. This was recently observed in the nickel market, where in recent years a surge of supply from Indonesia (developed primarily with Chinese investment) led to a sustained oversupply, making projects worldwide uneconomical. This resulted in closures and suspensions and rapidly increased the concentration of the dominant operator.”
China is the leading refiner of 19 of the 20 strategic minerals essential to sectors such as energy, defense, transportation, aerospace, semiconductors, and artificial intelligence, with an average market share of nearly 70%. Currently, China accounts for around 50% of global copper smelting production, and this share could increase further if current market conditions persist .
Therefore, not only will we have a 30% copper supply deficit in 2035, but we will also be almost entirely dependent on refineries in China.
Of course, this way we will not achieve any viable energy transition, nor will we be able to replace fossil fuels.
I see Quark is linking to this site as well. Two sites that try and just present the facts.
Thanks to the both of you
Duke, that is very kind of Quark, and you are welcome.
Shipowners would be idiotic if they think Trump and his arse lickers will ever pay up on any claim they receive for losses incurred under a promise of protection. Even if some agreement is put in place it will be too complicated for Trump to keep it in place for more than a few months and then he’ll lose interest and just abandon it like every other treaty.
George, Trump will tend to say what is expedient, whether it has substance or not. Shipowners are indeed sceptical at this point.
“Trump sought to mitigate fears of long-term disruption to the global oil market on Tuesday, suggesting that the US military stood ready to protect ships moving through the strait, and political risk insurance “at a very reasonable price” to vessels navigating the Gulf.”
They can’t protect them, so I’m guessing the real intention is to have the Gulf states commit their own assets with indirect support from our boats. Then when Iran sinks one or several tankers plus their escorts, use that as an excuse to hit Iran’s civilian infrastructure and maybe, as an added bonus, put some war-lust into the non-enslaved sections of the populations of our Arabian vassals.
It’s amazing to me, by the way, how easily supposedly “leftist” and right-wing youtube analysts have converged on the position that all of this is a personal mistake by Trump, under the hypnotic influence of Israel. There is clearly an energy-economic calculus playing out here, which is informed by some version of the doomer understanding of the accelerating crisis of net energy decline + climate change on the part of decision-makers (not Trump, not Netanyahu, not Putin, not Pezeshkian). Any analysis that cannot account for the collapse angle should be dismissed out of hand, regardless of alleged political leanings. I hope that as doomers we can all at least agree on that.
From Flippr’s comment above re-posting Quark’s latest article:
The conflict cannot drag on for more than a month, because the consequences would likely be irreversible. Trump faces a difficult situation because the Iranians have quickly identified his weak point (oil prices) and have decided to strike where it hurts most.
Exactly. Quark is one of the few sane voices (including our own Pan of course!) amidst the pandemonium of information psychosis. But to his point, what remains to be seen is whether Iran will back down after the US hits them (and by extension China) where it hurts.
Jupiviv, thank you for the compliment. Energy systems are certainly core to both the conduct and consequences of this war… but whether the conflict is a by-product of net energy stresses or a conscious attempt by the US/Israel to manage them is hard to know.
Or, to further Gail Tverberg’s game of Musical Chairs analogy, is the US just fighting for a chair or controlling the musical accompaniment?
It is a nothing burger . Warships cannot accompany tankers . They are sitting ducks . Hormuz is a two way lane . One lane for incoming ships and one way for outgoing ships . All must go in line , veer off and you hit a sandbank and are grounded . As far as insurance is concerned even the Fed’s balance sheet is not strong enough . Understanding a VLCC is 2 million barrels of oil = $ 150 million and the ship is worth $ 100 million . The total liability is $ 250 million per shipment . Problem number two : the insurer of the cargo is different from the insurer of the ship . Ships can be owned by a Greek company but be flying under a Panama flag or Liberian flag . Who gets paid ? Too many legal issues . Shipping companies are not stupid . With Lloyds which has 150 years of history and then the backup of the reinsurance who wants to go to an assurance by Trump . Like I said ” Stupid ” .
“The Maltese-flagged container ship Safeen Prestige was damaged by a projectile as it sailed towards the top of the Strait of Hormuz on Wednesday, prompting its crew to abandon ship, shipping sources said.”
https://www.reuters.com/world/europe/malta-flagged-container-ship-hit-by-projectile-hormuz-vessel-abandoned-sources-2026-03-04/
This is the ninth ship hit now.
I had a look at Gulf of Mexico drilling activity. Completions seem to be slowing down a bit quicker than expected and the deep wells are low flow (less than about 4000 bpd and fast declining). There are few new approvals for either exploration or development wells. However most interesting is Sparta, which may not be going as well as expected as so far this year three new wells have been permanently abandoned after some days of drilling and reaching total depth and another two cancelled before spudding. I think the three abandoned comprise all wells so far drilled past the surface casing. Two new wells have been approved and one new side track. There are none currently being drilled. Eight well slots are suspended with just the surface casing set.
I don’t think that any price rise, short term or prolonged, can make much difference to activity as there aren’t any marginal tie back opportunities and lease sales have been moribund so exploration is fading away no matter what.
Thanks, George.
The Gulf of Mexico was supposed to drive US oil-industry growth and offset slowing onshore production this year. Doesn’t look like that is going to happen.
Developing story: A submarine attack in the Indian Ocean?
——————
from Reuters
https://www.msn.com/en-us/news/world/over-100-missing-after-submarine-attack-on-iranian-ship-off-sri-lankan-coast/ar-AA1Xuxaf?ocid=msedgntp&pc=DCTS&cvid=4d90cc61fcab4efdbafe7f58dd000bae&ei=47
——————–
ME: So now what happens? Russia & Chinese attack subs looking for US subs and US Navy surface ships?
Bob Shaw Are Humans Smarter than Yeast?
“US defense secretary Pete Hegseth confirmed that an American submarine had torpedoed the vessel in international waters during a press conference on the war with Iran on Wednesday…
“Hegseth claimed the Tuesday night strike on the warship was the first time an enemy vessel had been sunk by a torpedo since Second World War.”
https://www.independent.co.uk/news/world/iran-ship-submarine-attack-sri-lanka-us-war-b2931613.html
Pan, according to AI Copilot: Hegseth is lying
——————————————–
General Belgrano sinking Falklands War
The sinking of the ARA General Belgrano by the British nuclear submarine HMS Conqueror during the Falklands War was a significant event that led to the deaths of 323 Argentine sailors.
The attack occurred outside the exclusion zone established by the British government around the islands, which was outside the 200-mile total exclusion zone at the time of the attack. The decision to attack the Belgrano was made by Prime Minister Margaret Thatcher, who believed the ship posed a danger to British ships.
The sinking of the General Belgrano is the only case of a warship being torpedoed and sunk in action by a nuclear submarine, and it has been a subject of debate regarding its strategic and ethical implications.
—————————–
ME: The Belgrano, and this Iranian frigate, was a stupid waste of lives. Even a full US battle group, with all the latest hi-tech sensing and sonar gear, has to sweat the ALL the details to detect a silent sub waiting beneath the thermocline layers of the deep. To make things even more deadly: the US probably has lots of drone subs patiently waiting for months on the seafloor until aroused into action.
This frigate should have never left its port.
Thanks, Bob. I should have remembered that.
I asked Copilot: have submarines evaded detection from surface fleets?
————
Yes, there were instances of submarines being undetected during naval exercises.
For example, in 2005, a Swedish submarine called HSMS Gotland managed to sneak past the sonar defenses of the US Navy Aircraft Carrier Ronald Reagan and virtually sank the carrier without being detected.
Additionally, in 2006, a Chinese submarine surfaced within five miles of the USS Kitty Hawk during a US naval exercise, successfully evading detection by multiple US warships and submarines. These incidents highlight the challenges of detection in naval warfare and the sophistication of modern submarines.
—————————-
Let’s hope that US detection tech has improved over the last twenty years.
Bob, why would you hope that US detection tech has improved? Are you implying that they are the ‘good’ guys? I know our host likes to keep this apolitical, but …
Stats from
@kpler
on Hormoz. Tanker transits are down 88% .
https://x.com/Amena__Bakr/status/2029125945958056405/photo/1
“Some 200 internationally trading crude oil tankers and product tankers are effectively stranded in the Gulf following a total halt of vessel movements through the Strait of Hormuz, triggering sharp disruption across global crude and product markets.”
https://www.lloydslist.com/LL1156500/Around-200-compliant-tankers-stranded-as-Strait-of-Hormuz-closure-freezes-Gulf-traffic
“Some 138-147, container ships, totalling around of 470,000 teu, are thought to be trapped west of the Strait of Hormuz… Many other vessels are unable to access ports within the Gulf region, and are stationary in safe areas.”
https://www.seatrade-maritime.com/containers/container-ship-hit-in-strait-of-hormuz-nearly-150-vessels-trapped
The chaos is so great that I have decided to focus for a moment on Basra and, more broadly, on Iraq, because I consider it one of the most interesting conflict points in the current energy landscape.
Today it became clear that upstream operations in Basra have already shut in around 1.5 million barrels per day of production, mainly because there is simply not enough storage capacity available. Oil, once produced, has to keep moving. When exports are disrupted and storage fills up, production has to be curtailed. Halting upstream production can also have structural consequences, particularly in the fields around Basra that are extremely important for supplying heavier crude used in diesel production.
According to reports, roughly 1.5 million barrels per day of Iraqi output is currently offline, with the risk that this could rise to nearly 3 million barrels per day if tensions around the Strait of Hormuz continue.
For the global oil market this is not a minor event. Iraq produces roughly 4 to 4.3 million barrels per day and exports around 3.2 to 3.4 million barrels of that. The remainder is used domestically. This means that already close to 50% of Iraq’s export capacity is effectively off the market, a classic Export Land Model situation.
Almost all of this export normally leaves through the southern terminals near Basra, fed by a small number of giant fields such as Rumaila, West Qurna, Zubair and the Maysan complex. Together these fields form the backbone of Iraq’s export system. If losses reach 3 million barrels per day, nearly the entire southern export system would temporarily disappear from the global market.
Oil quality also matters. Iraqi exports largely consist of medium and heavy sour crude, precisely the grades for which many refineries in China and India are configured. Replacing these heavier barrels with lighter crude changes refinery yields and can reduce diesel production.
In theory OPEC could compensate with so-called spare capacity. Official estimates place this at roughly 3 to 4 million barrels per day, mostly concentrated in Saudi Arabia and the United Arab Emirates. But that remains largely theoretical. Even if Saudi Arabia and the UAE increase production, much of that additional oil would still have to move through the same Strait of Hormuz. In situations like this the difference between oil in the ground, production capacity and oil actually moving on a tanker becomes very visible.
The situation in Basra illustrates something that often remains hidden behind large statistics. The world may technically have a few million barrels per day of spare production capacity. But once geopolitics, logistics and refining constraints begin to tighten at the same time, that margin of safety turns out to be far smaller than the headline numbers suggest.
It is difficult to determine whether similar upstream disruptions are occurring across the entire region. What is clear, however, is that the energy infrastructure of the KRG (Kurdistan Region of Iraq) is also under heavy pressure and partly shut down. The Kurdish authorities are certainly not aligned with Iran; on the contrary, they are increasingly being courted by the United States as a potential partner in opening a new front against western Iran.
The KRG normally produces around 400,000 to 450,000 barrels of oil per day. About 200,000 barrels per day are typically exported through the Kirkuk–Ceyhan pipeline to the Turkish Mediterranean terminal at Ceyhan. This route is effectively the only export outlet for Kurdish oil production. Following drone attacks, exports through Ceyhan have once again come to a halt or have fallen sharply.
https://oilprice.com/Energy/Crude-Oil/Iraqi-Supply-Loss-Could-Expose-the-Real-Limits-of-OPEC-Spare-Capacity.html
Thank you for the overview, Zip. Makes me think of thrombosis, with the artery of Hormuz blocked and oil/blood backing up.
More fallout:
Norsk Hydro has initiated a controlled shutdown of its Qatalum aluminum smelter in Qatar as of March 3, 2026, following the suspension of gas supply from partner QatarEnergy, which was caused by infrastructure damage from Iranian drone attacks. The 50/50 joint venture plant, with a capacity of over 636,000 tonnes, is expected to complete its shutdown by the end of March, with a potential 6–12 month restart timeline.
Thanks, Duke. There are so many knock-on effects and potential knock-on effects from this, it is hard to keep up.
“>90% of sulphur imported into Africa is from the Middle East… and therefore passes through the Strait of Hormuz. Let that sink in.
“I have heard that traders are already struggling to source any. Sulphuric acid prices will therefore significantly increase across Africa… and if the disruption lasts longer than ~3 weeks, copper oxide operations will have to close as they’ve run out of acid.”
https://x.com/robert_ivanhoe/status/2029120079695138870
Meanwhile, “The Swedish Central Bank’s new recommendation is that each adult keep one thousand kronor in cash at home, citing “the deteriorating global situation.””
https://swedenherald.com/article/riksbank-time-to-replenish-cash-adults-urged-to-keep-1000-kronor-at-home
Pan, sulphuric acid is the key element [S] for beneficiating phosphate rock into phosphoric acid so that NPK fertilizer can be made. Let that sink in…
https://shuncy.com/article/what-two-acids-are-used-in-producing-phosphorus-fertilizers
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Unlocking Fertility: The Acidic Duo Behind Phosphorus Fertilizers
Phosphorus fertilizers are essential for agriculture, as they provide the necessary nutrients for plant growth and development. Two key acids play a crucial role in the production of these fertilizers: phosphoric acid and sulfuric acid.
Phosphoric acid, derived from phosphate rock, is the primary source of phosphorus for fertilizers. It is often used in the production of diammonium phosphate (DAP) and monoammonium phosphate (MAP), which are common types of phosphorus fertilizers.
Sulfuric acid, on the other hand, is used to convert phosphate rock into phosphoric acid through a process called wet-process phosphoric acid production. This process involves reacting phosphate rock with sulfuric acid to produce phosphoric acid and gypsum. The resulting phosphoric acid can then be further processed to create various types of phosphorus fertilizers.
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Most global sulfur comes as a by-product of FF processing of sour gas and sour crude. From the nodding pump-jack straight to our mouths–> we eat FFs.
The targeted murder of schoolgirls reminded me of Ian McEwan’s “Atonement”, a story that is about the destructive power of a single lie, never mind a raft of them. Robbie ends up injured at the front in WW2, and as he makes his way toward the coast in hopes of a rescue, he comes across a field where the dead bodies of parochial schoolgirls are scattered like dross across the plain. Although he has been through the meat grinder of Nazi aggression, nothing prepared him for the atrocity he has stumbled onto and, in deafening silence he surveys the carnage as tears spring unbidden to his eyes and roll down his face.
The cowardly nature of air strikes on civilians has never been more manifest than now, yet the US secretary of War is proud of his “warriors” as he slinks around well-guarded in this, the home of the brave. The CCSA is now in full control of the country (Cowardly Confederate States of America”).
“This is the golden age of America …
People are asking me, please, please, please, Mr. President, we’re winning too much. We can’t take it anymore. We’re not used to winning in our country until you came along, we’re just always losing. But now we’re winning too much.”
We can’t take it anymore… cowardice is now a badge of honor. No longer need our pampered military risk their lives to mow down civilians: UAV’s, missiles and drones are, each and every one of them, like nuclear weapons, designed specifically to target unarmed civilians : murdered children and decapitated unarmed noncombatants are not collateral damage … they are the ones our warriors so bravely blow to pieces from the safety of their armchairs.
The Turd Reich, now with Jesus Christ as its Avatar, and yet another Aryan as its head provocateur, is even now upon us. God Bless our Barbaric heart.
Does it not speak volumes about us that we have been fulminating for years about schoolgirl-age children being sexually molested, yet the same man sheltering child molesters can murder even younger girls, who actually ARE children, and nary a peep is heard from the Epstein victims, nor pretty much any other American.
Thank you for that.
The Guardian called them “students”. Little girls aged 7-12.
The cruelty of the Israeli government is … I cannot think of what to say.
https://www.aljazeera.com/news/2026/3/3/questions-over-minab-girls-school-strike-as-israel-us-deny-involvement
https://www.middleeasteye.net/news/exclusive-iranian-girls-killed-double-tap-strikes-minab-school
We have become monsters:
‘According to Rohollah, his daughter survived the first strike and was moved to the prayer hall. The second strike hit before he could reach her.
‘We could only identify her from her school bag, which she was still holding. She was completely burned’
– Rohollah, father of slain girl
“My little girl was completely burned,” he said.
“There was nothing left of her. We could only identify her from her school bag, which she was still holding. She was completely burned.”
Rohollah recalls how his daughter wanted to become a doctor.
“She used to tell me, ‘I promise I will become a doctor so you won’t have to pay medical bills anymore.’ I would hold her and say, ‘You are already my little doctor’,” he said.
“When I saw her smile after coming home from work, all my pain disappeared. Now I don’t know what to do with this pain. I don’t know how to live with this.”
Also:
“Double-tap strike” is an informal term for a tactic that is a war crime. It appears to have been previously used by Israel in Gaza and the US in the Caribbean as recently as last year.”