Mark Gagnon

And those attacks forced major shipping companies to reroute around Africa, which added weeks and years.

You know, just more time and more money in cost.

And of course, it gets passed on to the consumer.

The insurance industry was already on edge from the Red Sea crisis when the Hormuz situation escalated, basically meaning that the global shipping system was dealing with two major chokepoint crises simultaneously for the first time ever.

You have this...

Insurance issue coupled with a military issue that makes everyone unstable.

And when things are unstable, markets are unstable.

And of course, oil production and the whole energy system is going to be unstable and you pay for it.

But Hormuz is different from all of these and arguably more consequential for one reason, that there's no alternative.

If the Suez Canal is blocked, ships can go around to the Cape of Good Hope.

And it's longer and it's more expensive, but it'll work.

If the Panama Canal is congested, there are other options.

But the Strait of Hormuz, if it's closed, roughly 20% of the world's oil supply is locked inside the Persian Gulf with really no ways to get out.

Sure, again, there's those pipelines on land, but it's just, it's completely ineffective for the quantity of oil.

Now, again, there are some alternatives.

So Saudi Arabia has the East-West pipeline, which can move about 5 million barrels per day to the Red Sea coast, bypassing Hormuz.

The UAE completed a pipeline in 2012, which can carry around 1.5 million barrels of oil per day to the Gulf of Oman, which again bypasses the Strait.

Iraq has pipelines running through Turkey, but combined, these alternatives can maybe handle like six or seven barrels per day.

Don't laugh at that, Chris.

That's a bad joke.