Christopher Smart is managing partner of the Arbroath Group, an investment strategy consultancy, and was a senior economic policy advisor in the Obama administration.
With little hope of a durable agreement between Washington and Tehran, shipping restrictions through the Strait of Hormuz appear likely to be an enduring feature of the world’s economy rather than a temporary disruption. Some bargain may yet emerge, but the region’s fragile balance has shattered, and the world will never again depend on this narrow waterway for so many of its most important supplies.
Beyond the conflict’s tragic human losses, however, the global economy has responded as it always does to a massive supply shock. Desperate buyers seek out eager new sellers. Some markets dry up, but fresh transactions appear elsewhere. For every financial loss, there is likely to be a new profit.
