Strait of Hormuz tensions, not alien war, threaten the global economy

There is no evidence of an extraterrestrial or religious war. What is straining the global economy is geopolitical risk in the Strait of Hormuz, the nuclear standoff with Iran, and the trade and technology rivalry between the United States and China.

## The strait that sets the price of oil

The global economy does not run on reptiles or wars from another planet. It runs on the oil that passes through the **Strait of Hormuz**. According to the figure cited by Senator **John Kennedy** on **Fox News**, roughly **20%** of the world's oil passes through it. That figure alone turns any closure into a problem of prices, freight and insurance. No alien invasion is needed; it is enough for a single tanker not to sail. The crude that does not get through has to take longer routes or simply never arrives.

Kennedy, a Republican from Louisiana, described Iran's leaders as part of a "reptile colony" that would also include China, Russia and North Korea. The phrase is a political slur, not an economic analysis. The senator also defended Donald Trump's military operation against Iran and repeated that the United States has "substantially degraded" the country. In his account, the only outstanding problem is Hormuz.

Trump met with the Iranian delegation for three hours on the sidelines of the UN in New York. His son-in-law Jared Kushner attended the meeting. Earlier, the president had laid out two paths before the General Assembly: a new deal on Iran's nuclear program, or letting Iran face "annihilation." Iranian President Masoud Pezeshkian responded that his country will neither surrender nor abandon its nuclear program. He said he will not bow his head.

## Xi, tariffs and chips: the war that really moves prices

Xi Jinping's visit to the United States is the first official state visit by a Chinese leader in more than a decade. Trump and Xi will hold a series of high-stakes meetings and a state dinner at the **White House**. On the agenda are trade, artificial intelligence and arms shipments to **Taiwan**. That part does have direct effects on stock markets, supply chains and interest rates.

Both leaders agreed to ease the tensions of their trade war last October, but made no headway at their May summit in Beijing. Senator Roger Wicker, chairman of the Senate Armed Services Committee, criticized the lavish treatment Trump gives Xi. He did so on the floor of the Senate. That mix of diplomatic gesture and distrust is what the markets watch. One word too many at the White House or in Tehran moves the price of a barrel in seconds.

## What the global economy is really betting on

If Hormuz closes, crude oil rises. If crude rises, transport, electricity and food go up too. Central banks must decide whether to raise rates to curb inflation or cut them to support growth. It is an uncomfortable dilemma. Kennedy argued that China could open the strait and that countries refusing to help will pay the price of a closure even more than the United States. That is his opinion, not a confirmed fact.

The idea of an extraterrestrial war has no proof at all. Nor is this a religious war in any strict sense: it is a power struggle, nuclear and commercial, with names and figures. That label does not explain why crude rises or why a chip factory delays orders. What explains those moves is the risk of a shipping passage closing.

Iran has not surrendered, China and the United States negotiate while competing, and Russia and North Korea appear in the rhetoric as adversaries. That cocktail is enough for companies to review inventories and insurers to recalculate premiums. Nobody needs to come from another planet. A closure of Hormuz alone gives us a global problem. The war that affects us is neither extraterrestrial nor religious: it is one of routes, tariffs and bombs.

None of this is investment advice; energy and asset prices move with changing information.