In a new article published by the New York Times, BWC Member Christopher Smart discusses the implications of the blockage of the Strait of Hormuz. It will be long before the Strait of Hormuz allows prewar energy flows. Even after the mines are cleared, it will be difficult to trust the safety of the Strait and to afford the higher insurance costs. The Strait’s closure has inspired the U.S., Brazil, Canada, Kazakhstan, and Venezuela to increase their oil production significantly. Smart states, “The longer the Strait remains blocked, the less important oil from the Strait becomes.” The blockage of the Strait has prompted a variety of solutions from each country, with global markets seeking to respond dynamically.

To read the full article, click here.

All views expressed by members are their own and not reflective of the views of the Bretton Woods Committee.