U.S.-Iran Tensions Impact Global Energy Prices

The ongoing conflict between the United States and Iran has escalated into a war of attrition, as predicted last week. According to Ming Pao, despite any public statements by U.S. President Donald Trump regarding negotiations with Iran, the reality is that both nations are deeply entrenched in this conflict. Iran, lacking air superiority, is unable to defend against airstrikes from the U.S. and Israel. Consequently, its primary leverage lies in the potential blockade of the Strait of Hormuz and attacks on oil infrastructure in other Gulf countries. Such actions could lead to a sharp increase in international energy prices, triggering inflation and interest rate hikes. This strategy aims to counter the heavily indebted United States, reminiscent of the United Kingdom's retreat during the Suez Canal Crisis in 1956.