Economic Impacts of Iran War
 

Re-opening this discussion, no partisan politics or discussion as to why the war started or whether it should have started.

It's here, lets just discuss that reality.

WSJ is calling this Gulf War III, but I'm not sure it's in the same league without lots of boots on ground.

Turns out this oil spike (to date) is a lower inflation-adjusted level than resulted from previous conflicts. Stock markets seem to believe that it won't last very long.

I think a big fork in the road comes if the Administration decides boots on the ground is warranted and to what extent the new regime, whose dad, mom and wife we were killed last week, is willing to burn it down on the way out.

A twist is the US Treasury allow Russian oil purchases

I don't think they care if we bomb them back to the stone age they'll continue to crank out drones & lob them into the Strait with enough success to effectively keep it closed. But what do I know - Jack $hit. Puts me on equal footing with the hucksters podcasters & tv hosts that got us into this.

Netanyahu(puppet master) isn’t going to quit until a regime change occurs. Iran has massive leverage with the flow of oil, so that change isn’t going to occur quickly.

Russia(big) was going to crush Ukraine(small) in a matter of weeks. Iran will get external support, just as Ukraine did.

This will last longer than we want it too. It really isn’t a complex mystery.

It isn't even truly known yet if the new guy in charge is actually alive, or if he is alive if he's in any condition to actually lead (coma, severe injuries, etc). It could be that the IRGC is really running the show. They certainly seem to be doing a good job for the time being on keeping a lid on any protests or internal uprisings.

The spike is a lot lower due to the first goal for oil spike crisis caused a lot of countries to begin their own energy independence from the Middle East. That’s how the US became more independent and why it’s not hitting us as hard as the UK and Britain. Still what what’s Scott Kirby says it’s true which I assume it is jet fuel being up 58% not gonna help anybody’s profit margin

Current spot fuel prices are where they were just a few days ago and going higher:

https://i.ibb.co/GDdhV8D/image.png

as noted from other thread, based off $4/gas.:

Daily increase in cost, in millions:
American - $19.8m
Delta - $19.9m
United - $19.9m
SWA - $9.4m

Apparently, the bigger issue is Europe, getting ~30% of their JetA from Kuwait. The upside? The lack of fuel supply might lend to canceling flights 20%-30%, which would push up margins and allow airlines to recover their increased costs.

If Saudi Arabia and the rest of OPEC pumps as much as they possibly can, the 20 mbd deficit will fall to about 12 mbd. That is still enormous. I honestly don't know why the markets haven't increased even more. The 400m barrels released from strategic reserves is being down at something like 2 mbd, hardly a dent.

agreed. It’s different than the first 2 right up until we have troops on the ground. although the first started solely as an air war, everyone knew the plan was a ground offensive after we owned the sky. I really hope that isn’t the plan here.

I was surprised here too. I have to wonder if that was a deal in exchange for them not supporting Iran militarily in this conflict.

UBS thinks that only UA, DL, and WN can stay in the black at these gas prices.

https://oilprice.com/Energy/Energy-G...rices.amp.html

Gulf I was BoG because Iraq had BoG in other countries.

Gulf II was revenge, we were collectively mighty pizzed off.

Gulf III has limited domestic support to begin with, and almost none for BoG. I hope and assume that congress would interject themselves if it got to that... they'd have more to fear from their own constituents than from Trump at that point.

I kind of doubt it was a deal per se, but it might have been a reward for good behavior... both RU and PRC are sitting this one out, aside from the usual strongly worded diplomatic scoldings.

They just aren't involved in any direct action. You better believe they are aiding Iran and collecting everything they can on us like Gollum going after his precious

was hoping Alaska would be on that list but I guess merging 2 companies and fighting rising fuel cost are not a winning combo wonder if AS will “right size” the HA side by getting rid of NEOs and back to a single narrow body fleet

They appear to not be providing any materiel support.

Intel, yes, it's known and assumed that they provide that. Of course we don't just roll over and make it easy... our systems and doctrine isn't oriented just towards a third-tier capability like IR... it's specifically designed to counter near-peers.

I find it amazing you get the last word in the other threads before you close them out. And now new rules of no partisan politics on why it started or whether it should have started. It’s here so let’s discuss that reality, I agree. But that conversation should have a portion which is why we got here to begin with. Because those are some ugly answers.

Most of the time they simply forget Alaska exists. They're probably talking about B6, NK, F9...

$11 billion+ dollars to replace an 86 yr old guy (who would literally die in 24 months or so anyway) replaced by his 56 yr old son. 11 billion to replace Senior with Junior, who by all accounts is even more strict than his pops.

4 airplanes lost now, 3 ejects, and 1 tanker unknown status of crew. 3-6 people on that plane. NONE shot down by Iran.


I think too many people think this is getting settled just as soon as the “4 week” campaign wraps up. There’s just no way this ends that fast. Even if we stop the bombing, Israel will keep going. And Iran is not taking their ball and going home. Iran’s long game can easily be periodical disruptions to the SOH or rockets/drones to infrastructure for US friendlies. They can indefinitely keep prices of oil high with random, periodic attacks on oil infrastructure.


Bottom line, this is very bad for the airline industry.

They aren't going to have many balls left. We're not going to let them retain stockpiles and production facilities. Right now all of their stuff is being attrited by us, or by being expended, whichever comes first. They can hide some, but not much.

No they cannot. This is their big temper tantrum, they shot their wad. The US, GCC states, and the rest of the world will not allow them to just randomly interdict the global economy whenever they feel like it, indefinitely.

While they have the capacity to create enough risk to spook maritime insurance brokers, that's not the same as having enough capacity to physically stop commerce. The rest of the world just has to decide they've had enough (or the Iranian people might).

Also while almost nobody in the US wants boots on ground, that is one way to secure the AG/SoH. I won't get into details but we don't need to seize the entire country.

It could be, we are very susceptible to economic fluctuations. It will depend on what the rest of the world does vis a vis oil, and how quickly this thing can be settled down.

I did not close the other thread. The only time I get the "last word" is if I'm explaining why a thread got closed.

Again, do not discuss how/why we got here, or whether it was a good idea, this is not the place for that and only leads down one road. If you're going to protest the war or complain about moderation, better to just stay out of this thread.

Yeah. Gonna try to not dip into R/B politics too much other than to say if this is still going on in November I expect to see a major blue victory in any even slightly purple area. And for that reason I think you are right that congress will reign in POTUS if this escalates or drags on.


That seems like a good reason for RU to sit on their hands.

As far as PRC; I assume there is definitely an element of posturing for Taiwan here.

What nobody is saying - All these countries that Iran is actually hitting, what would the damage be if they were permitted to have nukes?

proudly Boeing - what would they do for inter island flying ? You really need a 100 seat airplane for thin routes. Maybe bring in Horizon to do inter island ? Man I should be an airline executive

Also a member on Alaska airline BOD is former Boeing ceo. They get sweet Boeing pricing . It will be 787s , 737s in less than 3 years. As far as Amazon contract who knows. How much do you really make doing Amazon ?

If Iran had nukes, they would not be attacked like this. Nor would they start a nuclear war on their own.

Unless you go boots on the ground, they will replenish cheap drones in facilities we don’t even know about. We are blowing up their obvious targets - Air Force and Navy equipment.




What are you gonna do about it? Bomb them? They absolutely will create turmoil. Everyone in the ME has stabbed Iran in the back. They’ll remember all of it and retaliate this for time to come.

This overthrow nonsense needs to stop. It’s not happening. You don’t go bomb a country to obliteration and simultaneously tell the people to go uprise.


I’ve heard it all now. Obama will get us into a war with Iran. Kamala will get us into a war with Iran. Trump getting into an Iran war was wild - after calling out the other two for potentially doing the same.

Boots in Iran will fail, just like Vietnam and Afghanistan.

*sad trombone noises*

Protest is banned and only cheerleading allowed is how I read that statement. Doesn’t seem very “fair and balanced”. Not that I am surprised it’s just the quiet part out loud.

I agree with many that this is a long term war, excursion, diversion, special military action or whatever name that is reapplied daily like makeup. Iran is not getting bombed out of the ability to wreak havoc If it was the straits would be open today. The fact that we are two weeks in and they are not open says a lot. This has reinvigorated Iranian nationalism and they will not walk away quietly. The hornets nest has been kicked over.

I disagree. He knows that just like the average Palestinian the average Iranian is no fan of Israel. Any functioning Iran will still be a threat so I think he would prefer to keep bombing Iran until it looks like Gaza. Hence he is fine with destroying their oil industry and any possible leadership. Our goals are not aligned.

They don't need much of a 'wad' to disrupt the SOH for long enough to cause enormous economic pain. That's why it's called asymmetric.

As if it's a secret, and therein lies the big problem. No wonder it got leaked from the top of the Pentagon that this would be a mess.

The first Gulf war caused panam and Eastern to fail I wouldn't be surprised if we lost a few airlines this time.

Not surprising, AA could barely hang on when all the conditions were perfect.

Spirit, JetBlue and AA probably don't survive this as they are now.

That’s an interesting take. A terrorist culture with nuclear weapons being even keeled at the controls.

Why not NK?

if we're naming defunct airlines that went under in this time period, we can't forget about the man that managed to buy Eastern's most profitable domestic operation and bankrupt it in 3 years: Trump Shuttle (1989-1992)

"Terrorists" isn't correct word to call Spirit passengers.

What a mess. The only real way out of this is diplomacy. It will be way too easy to periodically aim some drones at a ship in the Strait of Hormuz. No one will insure these ships until this is over.

AA would have lost $6 billion + last year at these Fuel prices. Delta and United would have been closer to break even. So if only one major airline is crying to the government to help, will they get it? In a capitalist society one would think let the best companies win. All bets are off with the current administration. They seem to pick favorites. If I was Isom I would be concentrating on Washington. Touting the DCA dominance of AA and they need to survive.

AA has a young efficient fleet but global supply chain issues slow down parts. Those new efficient engines have high maintenance costs and need parts that are rare.

Current jet fuel costs are speculative. Another 1 to 2 weeks will be when they get more reactive. Supply and demand

I kept reading that thinking you were talking about Spirit, lol. I haven't seen any terrorist attacks by North Korea in the last 50 years, but I could have missed one.

Their asymmetric capability involved a *very* large inventory, built up at great expense over many years. They are rapidly expending most of it as we speak. Hence "wad".

If this drags out, global economic pressures will cause the system to adapt...

New insurance will be facilitated, if shipping companies and crews still don't want to take risks then ships will be sold, crews replaced by military, etc.

Navies can provide escort protection.

GCC countries have tried to walk a fine line, but they really don't like IR at all and if you choke *their* income long enough they'll turn against IR as well.

Trump will quickly feel political pressure at home (lots of rational people in his camp didn't like this one bit from the get-go). If he effs up the global economy and loses both houses this fall, he could get impeached over war powers and removed from office (at that point there would be enough defectors). If he can't control the situation by force, he'll have to do an armistice, and quickly.

Worst case, limit IRGC access to water. Iraq certainly wasn't meddling with the AG or it's neighbor's oil in 1992 or 2004 (yes it's a harder problem with IR).

Again, IR does not have the ability to seriously disrupt the global oil supply long-term. Short-term is different, and the fallout could last mid-term. The fixes in and of themselves are costly and disruptive, especially if it involves actually holding IR territory. Which is why I certainly never advocated for any of this.

Unfortunately IR is unique in that regard... they have made various statements regarding their intent to use nukes, including a previous president promising, in public, to nuke Israel as soon as they had the ability.

Their bluster is extreme, and while I suspect it is just bluster, Israel is simply not taking the chance... they have perfectly understandable holocaust PTSD and only have one big city, so would essentially cease to exist if they took one nuke hit.

I do not believe that IL will allow IR to progress to a bomb... they have the means to stop within hours, anytime they feel the need, and ultimately there's nothing to stop them. A one-sided nuclear conflict in the ME would arguably be worse for global stability than what's going on now. Certainly be worse for IR.

Or turn against the USA for helping to start this and showing that we have been unable to help protect them from drone strikes effectively.

You literally don't know what you're talking about (I do, professionally). We are far better than being limited to just "obvious" targets. It's a large country and takes weeks of sustained airstrikes to get around to everything planned. Of course there are priorities... your "obvious" front line military hardware targets take precedence because they are potentiality more dangerous to our forces and mission. Then lower-intensity (less capable) hardware, munitions storage and ultimately things like production facilities.

I wholeheartedly agree, if we try to take and control the entire country. That would be ludicrous, and everybody in the national security establishment knows it. Trump would get impeached if he tries to go there.

But there are other uses for boots, expensive but not irrational.

Very unlikely. We buy their oil. Fundamentally they actually fear IR long-term... since the regime's stated aspiration has long been to a establish a Shia Caliphate in the region, which would not likely be great for the Sunnis on the west side.

Minor drone strikes are simply the cost of doing this business. It's annoying, but not catastrophic... IR would not be using little drones if they had cruise missiles, capable strike fighters, stealth bombers, etc.