Wars Have Consequences
Energy prices are likely to be affected for some time.
Trump once said that “trade wars are good and easy to win,” which was a foolishly incorrect statement. However, as bad as trade wars are, shooting wars are even worse and harder to win than they might seem if one thinks that Top Gun is some kind of documentary.
Reuters reports: Exclusive: Iran attack wipes out 17% of Qatar’s LNG capacity for up to five years, QatarEnergy CEO says.
Iranian attacks have knocked out 17% of Qatar’s liquefied natural gas (LNG) export capacity, causing an estimated $20 billion in lost annual revenue and threatening supplies to Europe and Asia, QatarEnergy’s CEO told Reuters on Thursday.
Saad al-Kaabi said two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the unprecedented strikes. The repairs will sideline 12.8 million tons per year of LNG for three to five years, he said in an interview.
Note that this affects a number of our allies:
State-owned QatarEnergy will have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South Korea, and China due to the two damaged trains, Kaabi said.
One suspects, by the way, that the beneficiary of this will be Russia, which will be to Ukraine’s detriment.
Meanwhile:
The fallout extends well beyond LNG. Qatar’s exports of condensate will drop by around 24%, while liquefied petroleum gas (LPG) will fall 13%. Helium output will fall 14%, and naphtha and sulphur will both drop by 6%.
Those losses have implications ranging from LPG used in restaurants in India to South Korea’s chipmakers which use helium.
The damaged units cost approximately $26 billion to build, Kaabi said.
Note that we have only been at this for less than three weeks.
As Iran grows more desperate to force the US to stop, the more they will be tempted to attack more energy infrastructure.
And, of course, Israel is attacking Iranian energy infrastructure as well, which will also damage global supply. Of course, fear not, because Trump is warning them to stop via social media, as all serious presidents do.
This really is the dumbest timeline.
“Why do my actions have consequences?” Homer Simpson.
I expected Trump to fuck this up, but wow, I did not expect it would go full fiasco so quickly. This idiot is going to plunge the whole world into a recession or worse. I’m heading back to Portugal for 3 weeks in April and I am not enjoying the prospect of the dark looks I’ll be getting. I’m not sure how long European tolerance of Americans will endure, and if we have a major Trump-caused recession it’s going to get hostile. I’ve ordered FDT buttons. I feel like I should carry a print-out of my political contributions around so I can wave them and say, “Not my fault, I tried!”
@Michael Reynolds:
I’ll pass on the advice I got when I visited Europe during the Vietnam war – Maple Leaf flag pin.
I’m thinking of going into the bumper sticker business, my first product will say…
“Don’t Blame Me, I Voted for Her”
@Michael Reynolds:
I don’t know if you need to advertise. For some reason Trump supporters seem to be proud of him and themselves when they visit Canada, and do not keep quiet about this support. I assume it is the same overseas as well.
@Michael Reynolds:
I was last in Portugal in 2024 (Lisbon/Cascais/Estoril*), so you would know better about the emotional tenor towards Americans.
I did just spend 6 months in Sydney. People were VERY curious about my perspective, but I can’t say that I felt any a priori animosity. Perhaps I was just unaware. But I doubt it.
I’ve since moved to Belgium for another several months. And while the normative affect is quite a bit different than Sydney (I’m in the Flemish region, hence Dutch sensibilities**), I’ve not experienced any blatant anti-American hostility.
Then again, in person, I’m a pretty low-key, even-keeled chap. Have been told “You’re not a typical American” a few times here in Belgium — I accept the compliment (I’m also greedy and self-centered), but haven’t asked the follow-up questions.
Anyway, n of 1 and all that. And always subject to revision pending new data.
Keep trying.
*Very close to your residence.***
**If one can call it that.
***Not to sound all creepy and stalkery.
The whining about it being unfair when it was a war that we started against a country with inadequate air defense sound so pathetic? Childish? Seems like something I would hear the 6 y/o twins say, not an adult.
Steve
Well, ain’t this all just peachy?
We have about two to four weeks from now, depending on destination, when the last shipments from the Gulf before 28 February arrive and unload.
Then the real fun begins.
For a very arbitrary value of “fun”.
At the moment the main markets are only beggining to price in how bad it get if the Straits of Hormuz remain shut for more than a month.
And LNG is going to be more expensive for along time if the damages to the Qatar LNG is as bad as some accounts indicate.
In addition, there’s the teensy problem for the Gulf/Arabia that about 80% of their food is imported, and 70% via the straits. That combined with the loss of export revenues via the straits spells utter disaster for them.
I suspect that after this a lot of Arabians are going to think about their alignement with the US, mutter “f@ck this sh!t” and get on the phone to Beijing.
Iran shutting Hormuz has to be the most predictable and predicted response ever.
If the US/Israel action had been confined to “limited strikes” on air defence and missile targets as per last year, it might have been avoided.
But a full-on “regime destruction” campaign was obviously going to result in a counter-blow against the straits, and other targets.
The military logic was obvious: if going all-out against the regime, that made a ground offensive at the the north shore of the straits imperative. (Albeit also stupid, in a different way)
I’ve little doubt the CENTCOM contingency plans made this quite plain: if planning for “regime change” either go big, or go home.
There’s no middle way on it.
And that means accepting the very high probability of serious casualties, and another prolonged occupation, at best.
In other words, the perhaps unpoken but obvious implication: “DON’T DO IT, YOU DAMN FOOLS!”
The thing is, military planners won’t state that outright: as it’s a policy decision.
And with this administration, the obvious will just have been wished away, even by those who might have even begun to understand it.
Trump, Hegseth, Rubio, Vance, Miller, Kushner,etc: seldom has been assembled are more astounding combination of stupidity, incomptence, self-deception, venality, ambition, and moral cowardice.
I’m currently hearing repeatedly in my head a certain song:
The Mock Turtles “Why Must I Share This Air With Foolish Men?”
@JohnSF:
Q: What infuriates people more than expensive gas?
A: Expensive and scarce gas.
If the US and Israel stop their war, I don’t suppose Iran will keep Hormuz closed long. They won’t necessarily re open when hostilities end, but long after that.
But, if attacks on oil and gas production, processing, and shipping infrastructure escalate, well, an open Strait of Hormuz isn’t much good if there’s nothing for the tankers and other ships to carry.
BTW, I’ve no doubt the patriotic oil companies, which spent and unholy amount of money to get El Taco elected, will sell their vast production of oil exclusively to those who will pay the highest price, wherever in the world they happen to be.
@Kathy:
I’m not joking when I suggest the longer-term aftermath of all this could be the US out of the Gulf, and China in, with both Europe and India not that unhappy about it.
The long-touted US “pivot away from the Middle East”, but not exactly as described on the menu.
It should also be obvious to saner heads in Jerusalem that Israel is building up a rather large sum in the red “to be repaid” ledger.
Israel obviously had ongoing security concerns about Iran.
But wilfully blowing up the global economy is another matter entirely.
And I suspect the Gulf states current opinions about the “Abraham Accords”are probably unprintable.
Whether Iran now still has the firepower to destroy the key Gulf infrastructure is questionable.
But it would really be better not to find out by experience.
@JohnSF:
Not destroy. Damage, I believe so. How badly damaged can oil and gas infrastructure get? The Iranian drones have small warheads of about 40-50 kilos, according to what I’ve read, plus any fuel remaining* when they strike. This pales in comparison to standard 500 and 2000 lb bombs tactical aircraft can carry, I believe their missiles have larger warheads, maybe as big as a metric ton.
Refineries, oil fields, etc. have safeguards in place, considering they deal with flammable materials and there are energy inputs. I don’t believe they are designed with falling explosives in mind.
It also depends on how many drones and missiles Iran can deploy, how good their guidance, the patterns of attack, how effective are the interceptors, and, like a lot of things in wartime, random factors.
The more ordnance Iran can deliver, the higher the chances of a lucky hit that takes out a major installation.
I hope it doesn’t go that far.
On the other hand, the lucky hit might have already happened.
Iran’s attack on Ras Laffan, in Qatar, caused damage that “will take three to five years to repair, according to the QatarEnergy chief executive, Saad al-Kaabi.”
On the gripping hand, after Saddam set Kuwait’s wells on fire, it took far less time than predicted to put the fires out, cap the wells, and bring them back into production.
And now Bibi is talking about a “ground component.”
I don’t think Israel has the ships or planes to move their army to Iran. The troops, maybe. But not the heavy equipment like tanks, artillery, armored carriers, etc. The US does, but these things take time. It took months to assemble armies in Saudi Arabia back in 1990 for the invasion of Kuwait.
El Taco might think he can move tens of thousands of troops in a week or two. Bibi surely knows different.