By Micah Halpern
I've Been Thinking:
The Financial Times raised a very important issue in a piece they ran yesterday. The piece was about increased imports of oil from the Middle East, but that was not the profound part.
The Financial Times raised the following question: If the United States becomes more and more energy independent, as has been the trend and their objective, will the United States still devote and invest so many resources into keeping the Straits of Hormuz open.
The United States now dedicates huge amounts of military hardware and manpower to patrol the Straits of Hormuz and make certain that they remain free and open. The Straits run between Iran and Oman and about 33% of the world's oil passes through every day.
But if the United States is no longer a large purchaser of that oil, will they still protect the Straits?
The answer to that question was not given in the piece.
But the answer is probably --- yes.
The price of oil is determined internationally. A crisis anywhere, especially in the Middle East and even more so in the Straits of Hormuz, would mean a huge spike in the price of oil for the world and especially for the United States.
It would continue to be in the best interests of the United States to keep the Straits of Hormuz open and safe in order to keep the price of oil stable.
Micah@MicahHalpern.com
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