We are watching a slow-motion train wreck play out right in front of our eyes, and nobody can stop it. Every single day that the Strait of Hormuz remains closed, commercial oil inventories will get even lower and national strategic oil reserves will get even lower. Right now the global economy is using more oil than it is producing, and everyone agrees that we are reaching a major crisis point.
Unfortunately, we may arrive at that major crisis point even sooner than many experts were originally projecting.
The head of the International Energy Agency is warning that commercial oil inventories are “depleting very fast”…
International Energy Agency Executive Director Fatih Birol warned that the tally of commercial oil inventories is shrinking at an accelerated pace.
“I think it is depleting very fast,” he told reporters at the sidelines of a meeting of Group of Seven finance ministers in Paris, echoing comments from last week. It will be “several weeks, but we should be aware of the fact that it is declining rapidly,” he said.
He also highlighted that the spike in fertilizer and diesel prices comes at the start of the travel and planting season.
“This could have major implications for the food prices and together with the higher energy prices they might give a big push to inflation numbers,” he said.
Once the cushion that we are running through now is gone, energy prices will go completely nuts and we will see widespread rationing and shortages.
In fact, we are already beginning to experience a shortage of motor oil.
This is something that I wrote about yesterday, and today CNN issued a major report about this…
Wholesale motor oil prices are rising rapidly, and some industry executives are warning of imminent shortages caused by the war with Iran.
Damage to key facilities in the Middle East and the shutdown of the Strait of Hormuz have combined to create a perfect storm in this tiny but critical corner of the oil market.
The risk is that some of the most popular kinds of motor oil will be in very short supply, forcing drivers to delay getting their oil changed or rely on suboptimal lubricants.
“We’re looking at shortages — I have no doubt in my mind,” Holly Alfano, CEO of the Independent Lubricant Manufacturers Association (ILMA), an industry trade group, told CNN. “It’s a big mess — and it’s not going to be resolved quickly. It could take a year or so before we see any real relief.”
We all use motor oil, and so this is going to hurt.
The closure of the Strait of Hormuz has thrown global supply chains for motor oil into a state of complete and utter chaos…
The motor oil situation is another reminder of the fragile nature of global supply chains.
The problem is that almost half (44%) of the most important base oil used to make motor oil, known as Group III, comes from just three Persian Gulf producers, according to ILMA.
Those Middle East supplies have been derailed by the closure of the Strait of Hormuz after the war started in late February.
Not only that, but Pearl GTL, the world’s largest gas-to-liquids (GTL) plant located in Qatar, was attacked and seriously damaged in Iran. That means one of the leading suppliers of Group III base oils has been knocked offline indefinitely.
Can you imagine paying $200 for an oil change?
If the Strait of Hormuz remains closed, that is not inconceivable.
Of course countless other supply chains have been severely disrupted as well, and global supply chain stress is absolutely soaring as a result…
One week after Maersk CEO Vincent Clerc warned CNBC of a “new wake-up call” for global trade amid the ongoing disruption of the Strait of Hormuz and a deepening energy crisis that could intensify further in June, UBS analysts are out with a new note telling clients they have “reactivated” their Global Supply Chain Stress Index in response to increasingly alarming signals emerging across global logistics networks.
“Supply chain stress is rising at its fastest pace since the early pandemic,” UBS analyst Pierre Lafourcade wrote in a note on Sunday.
Lafourcade explained that global supply chain stress is emerging quickly, with the index rising by 1.2 standard deviations in March and April, the second-largest two-month jump since July 2020.
Slowly but surely, the consequences of this crisis are starting to filter their way through the economy.
For example, more than 5,000 supply chain workers have already been laid off here in the United States…
A sweeping wave of layoffs and facility closures has hit the U.S. supply chain, with more than 5,183 workers affected across at least 20 states.
According to a report from FreightWaves by Noi Mahoney, the cuts stem from shutdowns, restructurings, customer contract losses, and operational consolidations in logistics, manufacturing, and transportation.
Major employers including FreshRealm, GEODIS, Ryder, and DSV have announced significant workforce reductions as companies seek to cut costs amid softening industrial demand.
Authorities have been trying to keep everyone calm.
But investors are starting to get really jittery.
In fact, Treasury bond yields are beginning to rise at a very alarming pace…
What the president hasn’t been able to do, however, is address the worrying rise in Treasury bond yields, which remain elevated heading into the Tuesday session. Benchmark 30-year bonds were trading near the highest levels since 2007 at 5.147%, and 10-year notes traded at a 15-month peak of 4.613%.
That could feed further into inflation pressures, which are already building as the economy holds firm, labor markets outperform, and government spending remains elevated from passage of last year’s One Big Beautiful Bill Act.
We desperately need the Strait of Hormuz to be reopened.
But if more fighting with Iran erupts, that is not going to happen for an extended period of time.
On Tuesday, President Trump warned that there will be “another big hit on Iran” if a peace deal is not reached…
President Donald Trump said he was considering “another big hit on Iran” just a day after he said he delayed possible strikes following progress on a possible deal to end the war.
“I hope that we don’t have to do the war. But we may have to give them another big hit,” Trump told reporters on Tuesday. “I’m not sure yet. You’ll know very soon.”
As I have detailed in previous articles, there is no way that the Iranians are going to agree to a deal that is acceptable to Trump.
So more bombing is coming, and Fox News is reporting that Israel is rapidly getting prepared for the next wave of airstrikes…
Israel is preparing to take part in a potential U.S. strike on Iran, despite President Donald Trump’s statement on May 18 that he had paused a planned attack, according to reports.
Citing officials, Israeli broadcaster Channel 12 reported Tuesday that officials also believe Trump’s announcement may have limited his options.
The officials suggested that unless Tehran presents a significantly improved proposal — which Israeli leaders consider unlikely — Trump may decide military action is unavoidable, the report says, according to The Times of Israel.
On Monday night, Israeli Prime Minister Benjamin Netanyahu met with top military officials for five hours.
Needless to say, this was not a casual gathering…
Last night’s limited security meeting convened by Prime Minister Benjamin Netanyahu lasted nearly five hours – with the IDF chief of staff, air force chief, head of military intelligence, head of the Operations Directorate, and other senior defense officials in attendance – to ensure full preparedness for the possibility of an American strike, the report says.
There is a general consensus among pundits in the western world that the Iranians will eventually back down if they experience enough pressure.
They believe that because they don’t understand the Iranians.
Iranian Deputy Foreign Minister Kazen Gharibabadi has publicly stated that there are only two options for his nation…
“Iran, united and resolute, is prepared to confront any military aggression,” Gharibabadi wrote on X. “For us, surrender holds no meaning; we either triumph or become martyrs.”
In their eyes, agreeing to Trump’s terms would be surrender.
So that isn’t going to happen.
The Iranians have been feverishly preparing for the next round of the war, and they are warning that they are ready to use “new equipment and new methods”…
Iran’s army warned on Tuesday that it would “open new fronts” if the war resumed. “If the enemy is foolish enough to fall into the Zionist trap again, and launches new aggression against our beloved Iran, we will open new fronts against it, with new equipment and new methods,” said army spokesman Mohammad Akraminia, according to Iran’s ISNA news agency.
They keep issuing veiled threats like this.
I am convinced that what they are hinting at is the use of unconventional weapons.
Of course if Iran crosses that line, the U.S and Israel will likely cross that line as well.
We are so close to an apocalyptic scenario in the Middle East, and most people in the western world have no idea.
Meanwhile, economic conditions are crumbling all around us, and we are going to see some absolutely crazy things happen in the months ahead.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.
