There are multiple problems in energy market at once:Iran closed Hormuz again.The Houthis closed the Red Sea, blocking the remaining escape valve for Saudi oil.Ukraine is ‘droning’ the life out of Russian oil infrastructure like terminals, the shadow fleet and refineries, causing Russia to change from exporting diesel to importing it.World oil reserves are at very low levels.While oil hasn’t risen to $200 as some feared it could, this is only because demand for oil has been constrained by running down reserves (particularly in China) and the lack of refining capacity. Price rises in derivatives people and businesses actually consume (gasoline, diesel, jet fuel) has risen much more.Then there are new US tariffs and all this isn’t good for inflation and interest rates, with the US ten year yield is on the rise again:We’ve been here before and quite frankly, nothing is surprising, bombing them isn’t likely to change Iran’s hardliners, who clearly don’t care about their own population suffering, and they have several ways to make life very difficult for the rest of the world:Close Hormuz.Close the red sea (through the Houthis).Rockets and drones targeting US military bases in the Gulf region and energy and desalination plants. In the first round a couple of months ago Iran hit dozens of energy facilities in the region already, knocking out 20% of Qatar’s LGN facilities for years, for example.The options for the US haven’t changed:Take the loss, which is basically what happened a couple of weeks ago, but that MoU was vaguely worded and Iran claims it gave them control over Hormuz.Escalate militarily, which is currently happening, which will cost US lives (which has already happened) and poses grave risks for the world economy as prices of oil derivatives (diesel, petrol and jet fuel), oil will follow with a lag.It looks like at present, the second avenue is more likely, so it may be time to fasten your seatbelts.Subscribe now