Oil Won't Decide the War

Sever Plocker argues that oil will not decide the war between the US and Iran. The American economy is not in crisis, the cost of the war amounts to 0.2%-0.3% of GDP, and Iran is in economic collapse with damages of $200 billion. The price of oil does not threaten global stability, and the US has become a major energy exporter. Trump is working to establish a multinational fleet for free navigation in the Gulf.

Sever Plocker analyzes the claims accompanying the war between the US and Iran and determines they are unfounded. The American economy is not in crisis: it is growing at a reasonable rate, maintaining full employment and real wage growth. The cost of the war to the US amounts to 0.2% to 0.3% of the annual GDP of $32 trillion. The price of oil does not threaten global stability: only 2% of global electricity is produced from oil, and the US has become a major energy exporter. Tensions around the Strait of Hormuz will not collapse markets, as alternative trade routes have been found and Trump is working to establish a multinational fleet. Iran, on the other hand, is in economic collapse: damages of $200 billion, at least half of its annual product, 180% inflation on basic goods, and the Iranian military has suffered severe blows. Plocker notes that Trump holds a strategy of controlled attrition and political patience, waiting for Iranian disillusionment.

Oil Won't Decide the War