This article was originally published by Michael Snyder at The Economic Collapse Blog.
On Monday morning, the front page of the Drudge Report featured a very alarming two-word headline in all capital letters: “INFLATION ACCELERATES”. Of course, that headline was 100% accurate. Prices are rising, and our seemingly endless cost-of-living crisis is beginning to accelerate once again.
I have heard from many of you that are not happy with what economic conditions are like now, and you are really not going to be happy with what is going to happen in the months to come. The closure of the Strait of Hormuz has already begun to create shortages all over the globe. As the months roll along, those shortages will steadily intensify. That is going to directly affect our cost of living, because the law of supply and demand tells us that when there is less stuff to buy, prices go up. So the truth is that inflation will go to an entirely new level once the shortages caused by the crisis in the Middle East really start kicking in.
Needless to say, in many industries, prices have already risen to absolutely absurd levels.
This week, I was stunned to learn that a large bucket of chicken at KFC now costs close to 50 bucks…
When I was growing up, KFC was a place where you could feed your family inexpensively.
But now only the wealthy can afford to go to KFC on a regular basis.
These days, many families just stay home and don’t go much of anywhere because the price of gasoline is so high…
Amid concerns over the economic fallout from the war, the average price of gasoline in the United States has climbed to more than $4.55 per gallon, up more than $1.50 since the war began.
Where I live, many people are spending over a hundred dollars just to fill up their vehicles a single time.
But in California, things are much worse.
Some residents of Los Angeles are now paying more than 8 dollars for a gallon of gasoline, and the outlook for the months ahead is extremely bleak because politicians in California have been thumbing their noses at our domestic oil industry for years…
A supertanker docked in Long Beach just delivered California’s last incoming shipment of Middle Eastern oil, a grim milestone for drivers already paying the nation’s highest fuel prices.
After the New Corolla fully discharges its Iraqi oil at the berth, another tanker carrying Middle Eastern crude won’t dock in California until months after the Strait of Hormuz waterway reopens, according to market intelligence firms Vortexa and Kpler.
For California, the economic pain of the Iran war will last well beyond the arrival of the next tankers. U.S. drillers have fled the state and dozens of refineries have closed since the mid-1980s, forcing California to import 75% of the oil it consumes. Almost one-third of that comes from the Middle East, making California more reliant on crude-oil shipments from Saudi Arabia, Iraq and the United Arab Emirates than any other U.S. state.
When fuel shortages begin to pop up in the United States, it is likely that they will start in California.
But that won’t happen right away.
Asia and Europe will experience supply shocks before we do, and Eric Nuttall is warning that we could start to see oil rationing “within weeks”…
Energy expert and investor Eric Nuttall predicted in early May that the world was heading toward what may be the “largest energy crisis in modern history,” one that could spark oil rationing “within weeks” – and with the two-week mark now fast approaching, observers across the political spectrum began expressing alarm on Monday.
“We’re not talking months or quarters. In the next couple of weeks, you will have to rationalize demand by more than during COVID,” Nuttall told Bloomberg on May 1. “This is by far the biggest energy crisis that anybody alive is experiencing. There remains a lot of apathy in the market, because I just don’t think people can wrap their heads around it.”
I very much agree with that last sentence.
It truly is difficult for a lot of people out there to wrap their heads around what is about to happen.
But the truth is that the pain has already begun.
On Sunday, Indian Prime Minister Narendra Modi told his country that it is time to start conserving fuel and fertilizer…
India on Sunday became the latest country to call for sacrifices, with Prime Minister Narendra Modi asking his country’s 1.4 billion residents to conserve fuel and fertilizer, two essential goods usually shipped through the Strait of Hormuz. He also told them to cut back on foreign travel.
Over the past couple of months, the world has been running an oil deficit.
We have been able to keep things going by running down our inventory levels and our strategic reserves, but now we are rapidly approaching a breaking point.
There simply is not going to be enough fuel for everyone, and supplies of jet fuel are particularly low…
Growing anxieties around the jet fuel shortage caused by the Iran war have rocked the travel industry.
Tony Fernandes, chief executive of Air Asia, said last week: “I thought I’d seen it all with Covid […] but having seen jet fuel go up almost three times — this is much worse.”
It comes after supplies for jet fuel have tumbled to their lowest level since records began, as the war blocks crucial shipping lanes for fuel.
Of course, we will soon be facing very serious shortages of other vital commodities as well.
In fact, such shortages have already started to emerge…
Also in India, some restaurants have warned they’ll be forced to close due to a shortage of cooking gas, and factories in the country’s plentiful ceramics industry have halted production as natural gas shortages impact kiln operations.
Qatar, which accounts for about one-third of the world’s helium supply, stopped producing helium in March after Iranian strikes hit two liquid natural gas facilities, and the resulting shortage threatens the operation of MRI machines and the manufacturing of artificial intelligence chips, smartphones and electric vehicles.
Also needed for AI chip manufacturing is tungsten, a metal with extreme heat resistance and electrical conductivity that also makes it critical for armor-piercing munitions, which the U.S. and Israel are using quickly in the war, burning through American tungsten stocks.
The war is also heavily impacting the world’s supply of sulfur, much of which comes from Persian Gulf oil refineries, which is used across industries to grow food, make toothpaste, balance drink flavors and treat municipal water.
If the Strait of Hormuz is not reopened soon, we will be facing the greatest global supply chain shock that any of us have ever experienced.
I do not say that lightly.
The commodities that come out of the Middle East are absolutely essential to the functioning of the global economy.
Now thousands upon thousands of intricate supply chains are being disrupted, and conditions are going to continue to get worse every single day that the Strait of Hormuz remains closed.
Michael’s new book, entitled “10 Prophetic Events That Are Coming Next,” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book, entitled “10 Prophetic Events That Are Coming Next,” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com, including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books, you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream, and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.
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