Iranian naval exercises in the Strait of Hormuz are signaling Tehran’s threat of a blockade of the Strait of Hormuz, through which one-third of the world’s oil passes. Iran has made this threat before and has not carried it out, but, today, the regime’s back may be against the wall because its citizens have lost their fear of their rulers and the U.S. is prosecuting an economic war against Tehran via newly applied sanctions. It seems fair to speculate that a prolonged closure could deal a harsh and enduring setback to the global economy. While the odds may not favor such a move, this brief podcast (3:51) suggests it is important that investors understand this risk.
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