This week we talk about the Strait of Hormuz, oil, and Russia.
We also discuss Patriot missiles, expensive weapons, and peer rivals.
Recommended Book: Tiny Experiments by Anne-Laure Le Cunff
Transcript
During 2025 and early 2026, about 20 million barrels of crude oil and other petroleum products was shipped through the Strait of Hormuz every day. That’s about a quarter of the world’s total seaborne oil, and essentially all of that oil, and gas, and those other energy products that pass through this strait are from Middle Eastern suppliers like Saudi Arabia, Iraq, Qatar, Kuwait, the UAE, and Iran.
Beginning at the tail-end of February 2026, however, the Iranian military has shut down the Strait by threatening to take out or capture any vessels that attempt to pass through it. This has had the practical effect of initially reducing tanker traffic through the Strait by about 70%, but in recent weeks traffic has dropped to nearly zero. As of April 2026, about 2,000 ships are stranded in the area as a result of this closure.
As a result of this shutdown, though, other energy product suppliers have seen demand for their oil and gas and the like increase, and that’s led to higher prices for these products.
Russia, for instance, which doesn’t rely on the Strait to get its oil and gas out to its customers, has seen its oil tax revenue double in April, and the price of one grade of oil that it sells increased by 73% from February, alone.
That’s a big windfall for Russia, which has had trouble selling its oil and gas at a significant profit, due in part to heavy sanctions that have resulted from its invasion of Ukraine. It’s continued to sell to countries like China and India, but those customers have been able to pay lower prices due to the lessened demand for what Russia is selling.
This increased demand has thus goosed profits for Russia at a moment in which it could really use those sorts of profits—its economy is not doing terribly well, again because of its invasion of Ukraine, which has also not been going terribly well—so while inflation caused by this gas price-spike has been near-universally not great for much of the world, because energy cost increases tend to increase the price of just about everything, Russia’s government, at least, has been pretty happy with the shutdown of the Strait, and would probably love to see it continue.
Another moderate benefactor of this shutdown has been the United States government. The US is the number one exporter of liquified natural gas, and one of the top exporters of oil and petroleum products. US export numbers are poised to hit new records with the closure of the Strait, too, because, just like with Russia, fewer products of this kind available on the global market means those who have such products to sell can charge higher prices for them.
There’s a good chance this disruption, even if it ended today, for good, will have permanently rewired at least some of the global petroleum industry, as companies and countries that have been left in the lurch have adjusted their risks analyses and determined that it makes more sense to buy from different suppliers, to sell to different customers, or, in some cases, to use fewer of these products and invest more enthusiastically in renewables, like solar and wind—so while the US and Russia and a few other players are somewhat pleased with how things are going, oil and gas price-wise at least, long term this could actually harm them, the most, as more of their customers decide to stop paying irregular prices for what they’re selling and to opt for less turbulent solar and wind power, instead.
What I’d like to talk about today is another knock-on effect of the war in Iran that could have significant international, possibly even military implications.
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Since Trump first stepped into office, winning the US presidency back in 2016, allies have openly wondered whether the US could be relied upon as a military ally, should push come to shove.
Trump has repeated said that he thinks NATO is a rip-off for the US, as the US has long provided the vast majority of funding and weapons for the alliance, and he’s pushed European NATO members to step up their own investment, lest he decide to just led Russia or whomever else attack them; he’s openly speculated that he might do exactly that.
As a result of the US’s pivot away from happily playing the role of world police and invasion deterrent, European governments have been hastily putting together contingency plans that don’t include the US: if Russia turns its attention away from Ukraine and starts attacking the Baltics or Poland, they want to be ready, and they don’t want to have to rely on the unreliable Trump administration for their survival.
Other governments that have long assumed they would be protected, at least in part, by the overwhelming force of the US military, have also been rethinking things, based on Trump’s stated, if not always practiced, isolationism.
Taiwan, for instance, which is persistently menaced by China, which considers Taiwan to be a rebel asset that it will someday reclaim, has also been investing in its own defenses, no longer certain that the US will step up and help them out at their moment of greatest need, despite historical assumptions.
Adding to that uncertainty, though, is the increasingly depleted state of the US military following its attack on Iran, which began in earnest in late February of this year.
Since February, the US has expended around 1,100 long-range stealth cruise missiles, more than a thousand Tomahawk cruise missiles, more than 1,200 Patriot interceptor missiles, and more than a thousand Precision Strike and ATACMS ground-base missiles.
For context, those Patriot missiles cost $4 million apiece, and again, 1,200 of them have been used since February, and the US military only buys about 100 Tomahawks a year, so the military has spent 10-years worth of them already during this new conflict in Iran. And those 1,100 stealth cruise missiles were built for a potential war with China, but now they’re gone.
This rapid depletion of armaments, weapons that take a long time to make and which are very expensive to procure, has required that stockpiles from elsewhere around the world be quickly packed up and shipped to the Middle East; and while the majority of what’s been fired so far by the US have been missiles, these shipments include all sorts of bombs, vehicles, and personnel equipment like guns and bullets, too, because they have to be ready for anything.
The military has also redirected assets, like missile systems and carrier strike groups, from other theaters, like the Pacific Ocean, to the Middle East, which leaves allies, like Taiwan and South Korea, less well-defended against potential incursions.
The US has refused to release any estimates as to the cost of the attack on Iran so far, but a pair of independent groups have estimated that price tag to be somewhere between $28 and $35 billion, which is about a billion dollars a day.
What’s more, it’s estimated that it will take about six years just to get armament stores back up to where they were in February, before this attack; it’s not just costly, it also takes a long time to produce that many missiles and rockets. And notably, a lot of these weapons were already considered to be in short supply before this conflict, at levels not suitable for a full-on shootout with an enemy like China, according to military experts. So six years plus whatever would be necessary to get up to more suitable levels.
This shortfall is partly the result of how the US military deals with defense contractors, and there are efforts by new military startups to remedy this sort of situation, making manufacturing a lot more nimble, while also shifting to cheaper weapons, like drones and inexpensive interceptors, to replace the pricy, conventional ones that the country has long relied on.
This expanded production hasn’t begun in earnest, though, and conventional military hardware suppliers have been slow to spin up new production because new funding hasn’t yet been confirmed by the Pentagon.
So the US military is currently low on the weapons it would need to defend its allies in Europe or the South China Sea against attacks by rival, near-peer nations, at a moment in which such nations are making big moves, like China’s persistent expansion into the South China Sea, and Russia’s adventurism in Ukraine.
What’s more, these stockpiles are unlikely to be resupplied any time soon, the capacity to produce what’s needed simply doesn’t exist, not in the US, anyway, and next-step options, like mass-scale drone production, also haven’t kicked off in earnest, yet, and might not arrive for another 5 or 10 years.
This already precarious moment has been made all the more precarious by the US government’s decision to attack Iran, then, and that decision still hasn’t been fully explained, the actual end-goal unknown. Consequently, there also doesn’t seem to be a clear end-point to aim and plan for.
Show Notes
https://www.wsj.com/politics/national-security/iran-war-complicates-contingency-plans-to-defend-taiwan-some-u-s-officials-say-4384f7c1
http://nytimes.com/2026/04/16/world/middleeast/iran-war-cost-congress.html
https://www.aei.org/foreign-and-defense-policy/epic-fury-costs-as-of-the-april-8-cease-fire/
https://www.nytimes.com/2026/04/23/us/politics/iran-war-cost-military.html
https://gulfnews.com/world/mena/is-the-iran-war-depleting-us-weapons-too-fast-1.500517800
https://www.moneycontrol.com/world/iran-war-drains-us-munitions-raises-taiwan-defence-concerns-report-article-13898019.html
https://www.cbsnews.com/news/us-rearms-iran-ceasefire-advanced-munitions-supplies/
https://www.ft.com/content/1a5a2502-a45a-40c1-af6f-b30ecc34bacb
https://archive.is/20260424042150/https://www.ft.com/content/1a5a2502-a45a-40c1-af6f-b30ecc34bacb
https://www.nytimes.com/2026/04/24/world/europe/europe-defense-nato-trump-eu.html
https://www.washingtonpost.com/national-security/2026/04/23/aircraft-carrier-bush-iran/
https://archive.md/T9tD1
https://www.bloomberg.com/opinion/articles/2026-03-31/trump-s-iran-war-is-accelerating-the-global-energy-transition
https://www.theguardian.com/commentisfree/2026/apr/18/fossil-fuel-trump-green-revolution-us-iran-renewable-energy
https://www.axios.com/2026/04/24/trump-oil-export-ceiling-iran-strait-hormuz
