Peak Prosperity - Closing This Global Oil Chokepoint Crashes the World’s Economy

Episode Date: June 21, 2025

Iran has the capacity to militarily shut down tanker traffic through the Strait of Hormuz. If it does, and that lasts for more than a month, then the world economy will suffer a heart attack. Can they do it? Yes. Will they? That all depends on what Trump does next.Click Here for Part 2

Trump is currently deciding if he's going to strike at Iran. Now if he does, and Iran responds by closing the Strait of Hormuz, things are going to get really bad. The following is the audio version of a video released at peakprosperity.com. Visit peakprosperity.com to watch the video and to find other insightful content such as articles, discussion forums, and to find other insightful content such as articles, discussion forums, and exclusive subscriber-only content. Hello, everyone.

Dr. Chris Martenson here, and I'm back with another update for you. I have to ask and answer this question, what happens if the Strait of Hormuz gets closed? Now, if you don't know what the Strait of Hormuz is, that is a tiny little stretch of water that exists in the Persian Gulf. And here we can see all of the different choke points or passage points, if you will, for how oil transits around the world,

with the numbers in there being millions of barrels per day. Strait of Hormuz clocking in at 20.9 Let's call it 21 straight of Malacca Panama Canal all of those other places so straight of her moves obviously very very important and by the way some of that 20.9 Goes also comes out of there and then goes through the straight of Malacca. So little double counting in here This is the straight of her moves in that red Circular area right there. This is Iran This is the Strait of Hormuz in that red circley area right there. This is Iran, the UAE here, and all of these countries.

You have Saudi Arabia and Iraq and Qatar, everybody who produces oil puts it on a boat and it has to go right past this little bend right here. So we have to talk about this because the Strait is just a two mile wide, it's got a couple of two mile wide navigable channels, one for inbound, one for outbound. That's it. It's so narrow. There's only room safely to operate having one set of ships coming in and one set of ships coming out of there. All right. Now, here's where most of that oil goes. It says mostly to Asian. You might say,

Oh, well, if the straight of her moves gets shut down, obviously China and other Asia they're gonna be the most harmed, but it's irrelevant because global oil is global oil It ships to the highest bidders So if that straight gets shut down all of a sudden all of that oil that was coming out of the Middle East that isn't Translating the straight of her moves comes off the market the market prices rise Isn't transiting the straight of her moves comes off the market the market prices rise dramatically And then everybody starts competing for it and bidding for it including China India and other Asia now if that happens We could see oil go to two hundred three hundred four hundred dollars a barrel It depends how long the straight is closed down for and if that happens our debt addled

Global economies in the West just take it right in the shorts it's gonna be pretty miserable and would cause I would think market crashes and Other derivative problems depending on how long it goes on for so we got to take this seriously And it turns out you know about 20% of the world's oil consumption because we the world we the world burn about a hundred million barrels a day about 103 and About 21 of that comes through the straight of her moves. So that's you might say oh, that's that's 20% We could do with a 20% outage for a little while But in fact a lot of countries produce and consume their own oil oil prices are set that they say as they say at the margin

their own oil, oil prices are set at they say as they say at the margin. That means that the exported oil is the stuff that actually matters, the stuff that goes on the boats goes somewhere else and because of that dynamic we find out that about 40 to 50 percent of all the exported oil on a daily basis actually passes through the Strait of Hormuz. So that makes it very, very significant. 40% to 50% of all exported oil goes right through the Strait. Now, already in the Iran-Israel dust-up, if we can call it that, we can already see that there have been a few attacks here. One at the South Pars Field, one at the Fair father jam the cast refinery here two places Israel's already struck

some of the infrastructure here in the Persian Gulf so Iran has been saying quite clearly Well, you know if that happens or if this goes on further or if we get more attacks or something happens We will close the Strait of Hormuz down. Now, can they do that? That's the question. A lot of armchair warriors out there, I'm one of them. But I'm going to give my case, as I always do, I'm going to bring you the goods. So let's talk about this with some data and then you can make up your own mind what you think. Now, here's the Strait of Hormuz from Google Earth, just a little bit zoomed in. And I just drew

a sloppy red line in here just to show how tight of a corner the ships have to take. Remember there's just one shipping channel coming in, one outbound and think about a super tanker, a big giant huge ship full of oil trying to take a corner that sharp. Obviously it's going to be moving relatively slowly But there's not a lot of room here even though you know this is 10 kilometers Give or take a little over four miles So that feels like a huge amount of territory and area, but it's really not when you're talking about ships this large so Two miles strip coming in two mile wide strip coming out That's the whole thing.

And so obviously too, you can see the shores right here and that's just very, very close. So let's listen in and here this came from, this isn't, this predates the conflict that we're in right now, but I thought this was a reasonably stated position so that we can understand it from the Iranians position. Here's how they think about this at this stage. They cannot win a war in the Persian Gulf. Anyone who looks at the map knows that from the northern tip to the southern tip of the Persian Gulf,

Iran has a strong presence and it is a small Gulf or waterway, the Persian Gulf. The oil and gas facilities are impossible to protect. If there is war, the closure of the Strait of Hormuz would be a sideshow. That would be nothing in comparison to the complete and utter destruction of all the oil and gas facilities in the Persian Gulf, as well as all the tankers, and in the Gulf of Oman as well. Nothing will be left. It will take many, many years for these assets to be rebuilt in case there is a war. The international community will face the worst economic depression and the greatest economic catastrophe that

we've seen in modern times and it will be blamed on the United States for initiating conflict and for exiting the nuclear deal and for leading the world to this situation. And this is something that the nuclear deal and for leading the world to this situation. And this is something that the Pentagon understands and the CIA understands. Maybe a foolish person like Bolton or Pompeo who have abnormal worldviews, they may think otherwise. But the deep state of the United States recognizes the limitations of their power and the consequences of such foolishness. If the United States or anyone else in any way or form use the

countries on the other side of the Persian Gulf to harm Iran, then it is completely legitimate for the Iranians to retaliate. Well, I would agree. I think that people like Pompeo and Bolton do have bizarre worldviews. And they do think that they can get away with something like just attacking Iran and somehow Iran has no cards on the table. Obviously, they've got a very big card on the table the straight of her moves is And I hope there are people in the deep state in the Pentagon in the CIA who aren't crazy Like Pompeo and Bolton who understand the realities of the situation so is it possible for? Iran to shut down the straighter for moves now as I showed you it's just this little tiny little bend right here

geographically There's a lot of it's very hard to escape just how what a choke point This is 21 million barrels of they coming across this thing. That's about 50 kilometers right there that I'm indicating and All of this is very rugged ish sort of coastline There's towns everywhere and I'm gonna show you why that matters in a second But Iran just put out this video just well. I just came across it this morning, so let's look at it now They're looking at an underground naval base, and what do we see? Well, they got a lot of boats in there. Those are mines. I believe

You know mines that you would put in the water some of those look like drone boats Those are launcher missile launcher tubes on Those particular boats right there So that's the idea. These speed boats would come out, they would fire these missiles off, and off they would go and those would be directed against ships and if they hit them, well, you know, it makes a hole in the ship and when ships get holes in them, they sink. So that's just sort of a video we're gonna go through and look at the actual missiles in just a second so that you can make up your own mind what

you think is possible what is likely here but first we're gonna hear from my favorite sponsor I know what's plaguing you you feel like everybody around you has gone insane. Hello, Dr. Chris Martinson here. Look, we've built a world on cheap oil, endless growth, and borrowed time. But the cracks are showing. Inflation's up, resources are thinning, and the old rules don't seem to apply anymore. I've tracked this for years, from the crash course to today, and I'm not here to sugarcoat it. At Peak Prosperity, I'm your information scout

hunting down the facts, cutting through the noise, and showing you how to adapt. This isn't just information, it's a lifeline. The game is changing fast. Are you ready? Subscribe to Peak Prosperity now, and let's get ahead of the curve Alright welcome back. Let's carry on and look at this after we looked at those speedboats

I just drew some crude lines on this map right here to show you a couple things. That's the hundred kilometer mark That's 200 kilometers here So you could if you had a missile that could go a hundred kilometers You could have you could be anywhere inside this red arc and you could hit something that's right in the center of that obviously If you were had a thing right here, you could hit something way over here I'm just showing from the center point of the choke point of the straight of her moves You could launch from anywhere in here, and you could hit a ship right in the center of that And if you had a missile that could reach 200 kilometers, you could be anywhere in this

Ark right here and still hit a ship right in the center of that now is that realistic 100 200 kilometers sounds like a long way Well, let's start with this the anti ship ballistic missile ballistic missile means it goes up comes down very fast that Iran has and by the way Iran has just shown us that they know how to launch these things and they can hit targets a very long way away Some of their missiles are reaching well over 1500 kilometers into say Haifa, Israel or in Tel Aviv so they have the Kali's Fars the Persian Gulf Inti ship ballistic missile and a SBM. It's derived from the Fata 110 which they have been using so we know they work and Approximate range is 300 kilometers 300 kilometers so now we're gonna have to imagine a red line way out here You could have that little truck parked anywhere within that 300 kilometer range and you could hit a ship anywhere

Anywhere in here at that point time 300 kilometers gets you gets you it gets you there that transporter is not very big It'll fit in a medium-sized garage this thing this missile uses an electro optical infrared seeker for terminal guidance enabling it even to hit a target That is a moving naval vessel carried on mobile truck launchers Approximately 650 kilograms with a speed of Mach 3 so it's gonna be Committing two sorts of violent acts It's going to have kinetic energy just from traveling that fast weighing that much just hitting a ship when you weigh that much even without a warhead you're making some holes in it and it's got 650 kilos of explosive on there so this is going to be in particularly if it's ballistic and

coming straight down and hulling a ship like it's gonna create a lot of damage and sink ships very quickly and it is specifically an anti-ship ballistic missile so that's they got those well they also have the one based off of the FATO 110 they have the H1 and H2 and by the way these also range about 300 kilometers they're equipped with anti radiation homing seekers designed to target radar emissions from either land-based Hormuz 1 or sea-based Hormuz 2 platforms making them effective against ships with active radars reported at a Mach 4 to 5 so 4 to 5 times the speed of sound and about 500 kilos of

Explosive on their thousand pound warhead again gonna make a lot of damage and look it's launching off of a little tiny truck based platform Or how about this one? the Zulfigar Basir, uh oh, this is an anti-ship, also a ballistic missile, you see pictures of him right here down below me. Range is 700 kilometers, uh oh. Also features an electro-optical terminal seeker, similar to the Feliz-Caliz-Fars for targeting moving ships and It's deployed on mobile truck launchers and the extended range allows it to cover the Gulf of Oman parts of the Arabian Sea

Significantly expanding Iran's maritime strike capacity. So now all of a sudden when we talk about any ship any ship Any ship US naval asset Merchant Marine oil tanker, whatever that's in the Persian Gulf is well within range of these From from pretty deep inside of Iran which creates targeting Target problems for those who want to take all of these missile systems out you can't miss one You got to get them all and you can park these things in garages look at the scale of these things next to a human Standing next to them you can see that well that's you know you could probably park that in a lot of places and it would be pretty well hidden and this is a newer Zulfagar variant obviously a little bit slimmer these are a little

bit stubbier or thicker a little bit thinner here and so this is now in multiple generations they've been improving these things um and oh well there's also the Kadaars there's the cm-300s. There's the norse I think we saw some versions of those on those boats those will fly out those things go from 15 to 300 kilometers Based on the old tried-and-true Chinese c8-02 How about oh? Well, what if we they had missiles that went a thousand kilometers now? How hard would that be to figure out?

So here part of Iran's KH-55 derivative lineage turns out Iran's pretty good at the rocket thing They've been working on it a while and they've just shown the whole world that they work and they know how to use them and this thing has a range of thousand kilometers, which is about 620 miles deployed on an 8x8 truck chassis and Introduced by the rate into the Iranian Navy in December of 23 So it's a newer system features advanced guidance systems potentially including AI for mid-flight target switching and complex flight patterns to evade detection or Destruction I would assume. Designed for long-range

precision strikes against naval targets with sea skimming mode to avoid radar so it can also come down low and fly low and fast. Wow that's gonna be hard to stop. Well what about 1,500 kilometers? So here they've got the Carter 380L. It's an anti-ship cruise missile speculative limited reports 1000 to 1500 kilometers who knows mentioned on posts and acts as part of Iran's advanced anti ship arsenal specific details a little bit scarce haven't seen him in action yet likely truck mounted given Iran's preference for mobile launchers so they know as well as anybody Iran very you

know they know they're the underdog in this fight mobile launchers help even the scales a little bit because if you have Mounted land-based launchers people know where they are and then you go take those out as a first-order business Trucks are a lot harder, so let's talk about that for a second. Let's imagine that These anti-ship missiles could be hidden on trucks anywhere. Let's imagine in that red circle There's that little island thing right down there Just off of this straight of her moves Let's dial in all the way down a little further. Let's go to this town of Ramchand Yeah, that's what it looks like you would like to targeting nightmare. You're flying over you're in a US You know

Airplane some kind you got a couple of bombs and somebody somewhere has said we want that one You're not no up to the left. Yeah that one and the other one and hope that you hit something, right? Obviously these things can be hidden anywhere. That's just that's just what you get just dialing in on this one little town There's towns everywhere towns and cities structures everywhere these things are going to be very easy to hide if we look at this the straight of her moves is not defendable really from truck launched missiles their missiles can reach very very far and obviously the entirety of the persian gulf and if they got

spicy about it really the entirety of the gulf of oman the arabian sea big chunk of that Obviously these missiles would create kind of a nightmare so that's the story and At this point I have to say the conclusion is it's impossible for the Strait of Hormuz to be protected from these sorts of missiles and guess what if It is closed for any length of time oil spikes if it's closed for more than 30 days, oil spikes even harder, and then what happens?

Markets crash. We have a very, very precarious situation in the West right now with the United States, deficit spending like crazy, we need our debt markets to keep flowing. Oil at $200 a barrel breaks our economy, and therefore it breaks our markets. Oil at 400 a a barrel breaks our economy and therefore it breaks our markets oil at 400 a barrel Just breaks everything just all of it all at once and so that's the problem here now

Remember as I say as I'm fond of saying It's not really the destination if we went to $400 a barrel over the next decade We'd manage it, but if we go to $400 a barrel in the next month or two Then we have a huge problem. So if you see the Strait of Hormuz getting attacked, if there's anything kinetic that happens in there, if like a, you know, a ran mines it or a tanker, God forbid, gets hit and is on fire, I just want you to run not walk towards your final preparations. Now, I got to talk about this with part two of this is for subscribers back at peak prosperity for my members

We are going to be talking about a number of things including how likely is a US bombing campaign against Iran this weekend How much further escalation and what would happen if that happens economically and then we have to talk about the MAGA Fracturing that's underway and we're going to talk about that in the context of rats in a cage and this fifth generation warfare that is being levied, I believe, to demoralize us, to break us apart and to have us begin to lose faith because that's what somebody really wants. So that's what we're going to talk about. For everybody else, thank you for listening. Let's talk about this if the Strait of Hormuz gets attacked. Now you know, it was unavoidable in a sense that as soon as you bomb a country that controls

the strait, you should expect that you're going to have trouble in the strait. If that happens, this will be a self-inflicted wound of by the West upon itself. And what happens next is completely predictable. Our lives get harder. With that, thank you very much for listening. I'm Chris Martenson. I'll see the rest of you back over at peak prosperity. Bye for now. you