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• It has now been more than two months since the conflict broke out
• Share a map of the Strait of Hormuz
• The strait was called ‘Trump’s Strait’

US Economy and Hormuz: It has been more than two months since the Iran-US/Israel conflict flared up. In all these situations, there has been a huge tension between America and Iran. Last month, the US imposed a total naval blockade on Iranian ports in the Strait of Hormuz, aiming to increase pressure on Iran. This action has disrupted global oil supplies. Meanwhile, US President Donald Trump recently shared a map of the Strait of Hormuz on social media; In which he has named this strait as ‘Strait of Trump’. But is this going to make any difference”text-align: justify;”> Many credit cards trapped in the trap of EMI? You can get out of debt in a flash, know Smart Tips

Why is this sea route important?

The Strait of Hormuz is the world’s most important strategic barrier. Approximately 20% of the world’s total oil and LNG consumption comes through this narrow passage. About 20 million barrels of crude oil pass through this route every day, the lifeline of the global energy market. The possibility of this route being closed has caused sleepless nights not only in Asia and Europe, but also in America, the world’s largest economy.

Why is ‘Hormuz’ so important for America?

If the Strait of Hormuz closes, crude oil prices will skyrocket. This also affects America. It is precisely for this reason that America’s desire to maintain its control over Hormuz is so strong that Donald Trump even reportedly considered renaming the Strait of Hormuz after himself as the ‘Strait of Trump’.
Although the US itself is a major oil producer, its domestic market is inextricably linked to global price movements. As oil supplies dwindle in the international market, prices skyrocket. This has a direct and immediate impact on US gasoline and diesel prices, as well as overall transportation costs.
Rising fuel costs increase both transportation and production costs. As a result, prices of food, consumer goods and daily necessities across the country are affected. As a result, inflation accelerates and puts a huge strain on the US economy.

US GDP hit

Rising costs and market uncertainty adversely affect the profitability of companies. This creates fear of a possible fall in the stock market. If such a situation occurs, America’s economic growth rate (GDP) suffers. In this scenario, the economic recession begins to creep over America.
If inflation continues to rise in the US, the Federal Reserve, the country’s central bank, is forced to raise interest rates in an attempt to control inflation. This makes borrowing more expensive. As a result, both investment and consumer spending in the US could slow.

Will Trump gain control of oil?

If Trump gains control over the Strait of Hormuz, he may also gain the ability to control oil prices. Currently, crude oil prices are skyrocketing; They even crossed the $126 per barrel mark. If the Strait of Hormuz comes under Trump’s control, oil tanker traffic could resume, potentially driving down oil prices. This will avoid the risk of global inflation. But, this situation is still full of uncertainty. This may also lead to geo-political conflicts and its consequences may be felt in India as well.

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