Every now and again, I walk into the studio that we used to make our YouTube videos with Thomas and suggest that I just sit down and speak off the cuff on an important issue. This video was made that way. Sometimes I just have to speak about things the way they are.
Three weeks into the Israel–USA–Iran conflict, the real story is no longer military. It is economic.
The closure of the Straits of Hormuz threatens oil supply, fertiliser production, food security and global trade.
In this video, I explain why:
- Oil prices could surge dramatically
- Fertiliser shortages risk crop failure
- Inflation and trade collapse are now likely
- The global economy faces systemic shock
This is not just a regional war. It is a global economic crisis in the making.
This is the audio version:
This is the transcript:
Where are we with regard to the war between Israel, the USA and Iran?
Three weeks in, which is where we near enough are, things are going very badly for the USA and Israel. They're going pretty badly for Iran, let's be honest. For the rest of the world, it's looking disastrous. What we need to do right now is understand where we are and what the consequences are going to be, and let me promise you, there is nothing but bad news in what I'm going to say.
Israel and the USA obviously assumed that they could impose regime change on Iran from the air, although throughout history, nobody has ever succeeded in doing that. Boots on the ground have always been required. It is clear that Israeli and US forces have created turmoil in Iran. They have created staggering economic damage. There are large numbers of casualties, and we know that this will have an enormous cost for that country in the future.
But that said, Iran is still fighting back. The regime is still in power. There is no sign at all, as yet, that the people in Iran want to overthrow it. And there is no sign that they are going to reopen the Straits of Hormuz any time soon.
What's the consequence of all this? Let's be clear. The Straits of Hormuz have become critical in a way that was entirely predictable. I am aware that this issue has been discussed many times in the past as the pinch point in the conflict between these countries, and now Iran has used its weapon.
The Straits of Hormuz have 20% of all the world's oil flows through them. One third of all the raw materials for fertilisers flow through those same straits, and the Gulf states are, in very large part, dependent upon both water and food brought inward through those straits. None of that is moving at present. Nor is there air traffic into the Gulf States, either right now. Dubai has closed its airport for the foreseeable future. Nobody can get insurance on ships or aircraft. Everything is shutting down.
Iran has played its trump card, and it's got to be said in military terms, it's played it well. In terms of political economy, it's used the only power it's got, which is to shut the Straits of Hormuz, and as a consequence, put everybody else at risk, economic risk, and even physical risk.
And let's be clear, what are the consequences of what it's doing? We all talk about oil. We can see the price reaction. That price reaction has gone nowhere near to its limit as yet. It's quite possible that oil will reach record prices, maybe $150 a barrel, it could be even more.
That's going to have a massive impact upon the UK economy, the worldwide economy, the economy of every country within it. Any country that is oil-dependent is going to see its balance of trade collapse as a consequence. There is going to be enormous global economic stress as a result of that factor alone, but that is not the end of this issue.
The big issue is actually the one with regard to fertiliser. Urea and sulfuric acid flow in large quantities, as do phosphates, through the Straits of Hormuz, and those are critical to fertiliser production.
Fertiliser is needed by April in many cases. It's not going to get there unless something very rapid changes in the scene. The fact is that Iran is holding the world's people to ransom, because come this autumn, there could be famine on the horizon because of a crop failure. The world is dependent on fertilisers. And it's not going to get them if the Straits of Hormuz are closed because all the chemicals required to create them are currently stuck inside the Gulf. This is where the real crisis is going to begin for the world beyond the Gulf.
Inside the Gulf, the food and water crisis could come even sooner. States like Kuwait, and partly Iraq, and other countries in that area, are all dependent upon imports of water and food through the Straits of Hormuz; again, those aren't happening. The fact is, as a consequence, that they are going to be in dire straits and soon. We are in absolute economic, and social, and physical and military turmoil as a consequence.
We know that many countries have been asked to join in with Trump to fight in the Straits of Hormuz. Quite rightly, these countries are saying to the US, “You started this war. You get yourself out of it.” That's a fair response.
Iran has named its price for getting out. It's said the price is an end to all US air bases in the Gulf, and $500 billion in compensation. You can see why they're saying it. They have been shattered by what has happened. Why shouldn't they ask for compensation when this was an illegal war? When they have suffered civilian casualties as a result?
My point is, everything indicates that we have not seen anything like the impact of this war as yet.
We are going to see inflation.
We are going to see our balance of trade collapse.
We are going to see shortages of fertilisers.
We are therefore going to see food shortages.
We're going to see shortages of raw materials for industrial production.
The whole of the AI industry is apparently dependent upon raw materials that, in large part, come from the Middle East. That means that the industry on which the world is pinning its hopes is going to have no hope at the time being because it will not be able to get the chips it wants.
Everywhere you look, you see a crisis coming out of this, and everywhere you look, you realise that Trump and Netanyahu had no idea what they were doing.
This is a war that is going to be a disaster for humankind. It's not World War III, but the consequences are going to be worse in many ways than a World War, and they're going to hit harder and sooner. Famine, economic disruption, massive inflation, turmoil, political disruption, democratic disruption, and a complete reframing of the politics of the Middle East, all of that is on the cards, and we just don't know where things are going.
This is a situation of genuine uncertainty. Uncertainty where we cannot appraise all the possible outcomes.
What I can say with certainty is this is going to end in misery.
There is no good outcome here now.
There is no prospect, even if Trump and Netanyahu were both got rid of, this will be resolved peacefully and easily, very quickly, without all the consequences I'm talking about arising anyway.
There is no chance, for example, of the Straits of Hormuz being opened in April, which is required for fertiliser flows.
There is no chance of avoiding major production crises in so many industries around the world that there will not be major shutdowns.
All of those things are now as near certain as can be.
So, my point is, we are in a mess. The only thing we can do is stop digging, and the people who have got to stop digging are, of course, Trump and Netanyahu. The fact is, we are in this mess because of these two men, both of whom wanted to avoid going to prison; let's be clear, that was their alternative fate.
For the sake of that, we're going to pay the most terrible price, and that terrible price is going to be utter economic turmoil of a scale that it was very hard to imagine anyone could deliver to the world, but which will happen because Trump and Netanyahu decided to pursue an illegal war, forgetting that actually Iran had the power to fight back in a way they had not anticipated because they still control the Straits of Hormuz and their people are willing and able to still fight even though they have suffered enormous losses.
This is terrible. I haven't got a better outcome than that. Brace yourself for what's to come because you're going to need to. We are all going to suffer for the folly of two very stupid men.
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Trump and Netanyahu have no idea of the consequences of what they have unleashed. Even if the Straits opened today it will take months before “normal” supplies are resumed.
The world will be suffering including the USA and Israel.
Perhaps one unintended result maybe that the economic concept of infinite growth will be overthrown.
Let’s hope that any economic downturn is not met with more austerity.
We can all agree that Putin was wrong to invade Ukraine and he violated international rules. This is only time I see our conscience work and our voice heard and our leaders act.
When it comes to west and it’s actions ok there than Russia, we all find it difficult to agreee that the below violates international law:
genocide in Gaza
kidnapping of a president of a sovereign country
bombing of Iran
bombimg of Iraq, Afghanistan etc.
regime changes
our leaders are silent and play along with US….so I guess we take ownership of the outcomes as well.
I am sorry and it makes me angry – it is unacceptable that US(and it’s allies) can bring this upon on the third world which grapples with poverty and a fight to survive. We in west are angry because we are seeing living standards drop (rightly so) – how much thought we give to the global south and the devastation cause by these actions.
Whilst having no illusions about the economic effects at all, two other matters come into view via this conflict from where I am standing that are going to have lasting effects:
1. There is a strong undertow of the Judeo-Christian persecution of Muslims along the lines of Steve Bannon’s world view. It’s palpable to me and it’s bad news.
2. Having bullied Europe into a self defence of itself from Russia, a sort of ‘second front’ has been opened up in the Middle East that Trump wants us to join in on, even though apparently he has been helping us. He must know that this would stretch Europe and only help Putin.
‘Stupid’ men you say? No. ‘Wicked’ is what they are.
Wicked, I accept.
A friend of mine taught in an FE College for a while
He rather annoyed management and inspectors as he never prepared lesson plans relying instead on inspiration, what he called the doorknob approach.
As he opened the classroom door what he was going to teach came to him.
Which is what you have done and very well.
Interesting article by George Monbiot here BTW
https://www.theguardian.com/commentisfree/2026/mar/19/iran-greed-oil-capitalism-regimes
I admit that when I was lecturing I used to promise my students at my lectures would start, and end on time but what happened in between was the result of the interaction between them and me that would arise during its course. It was not random. Of course I knew what objectives I was trying to fulfil but I was also trying to take them on a journey with me, and their interaction always change the way in which the narrative developed.
Thanks to all for your disturbingly relevant article.
Might the attached article be of interest/relevance?
https://www.counterpunch.org/2026/03/19/how-this-ends-escaping-the-dark-triad/
What might the [repeated] elections of these leaders indicate about the democracies that elected them?
As ever, some parts of world will be hit sooner and harder than others. The US will escape the worst. Europe will be impacted much more and I can see this US government taking full advantage of us. The real regime could happen here.
Sorry – I meant Regime Change.
[…] recorded the video that we published this morning on the war in Iran a couple of days ago. Even then, I felt the […]
If it isn’t World War Three, then it must be Globalised Conflict One. However we frame it, we need Governments here and around the World to move to crisis management mode, both on a national basis and through global cooperation. We also need a new kind of Opposition. One that offers sincere, constructive criticism and not the usual cheap point-scoring. Everyone in Westminster with even the tiniest ability to govern must know all this. So why pretend that we can carry on in the same old way?
Will people round on the rightist Trump cheerleaders in the UK – as they should?
Or will there be the mother of all attempts at laying the whole blame for what’s coming at Labour’s door? I think we know the answer.
Does the government not see what’s coming down the line for the economy? Surely you would want to preemptively help the economy rather than waiting until it’s a complete disaster, then make some token gestures tyo try and rescue what’s left?
You might think that
So might I
They don’t
Some things that we have refused to acknowledge for far too long, are now very painfully, being forced on us…
There is a better world ahead, but the route to it, is rough, rocky and uphill almost all the way.
We have what we need to get started.
Much to agree with
The spontaneity of your post/video may unfortunately have something in common with the Trump press ‘conferences’ / policy meetings. It seems clear that Trump sort of riffs and makes it up as he goes along – to get the audience response he wants at the time – knowing full well he can say the exact opposite tomorrow.<p>
I thought of him as the Billy Connolly president . Connolly said he has no idea what hes going to say in his stand up gigs – he riffs off himself and audience response.
I’ve nothing to add to what has already been said, apart from Richard, you are looking and sounding better.
I am getting there. We recorded this mornings and, at last, I felt back under control.
I have been reading a number of articles in which the authors outline their fears about the collapse of the private credit universe and the fact that the resulting crisis will be as severe as 2007/2008. The illegal attacks upon Iran coincide with such a possibility and can only accelerate the process, as we approach year end one can see that the estimation of the carrying value of investment balances will be an issue. I understand that regulated UK entities are allowed to make loans (create money) for the “benefit” of the unregulated funds.
This takes me to you letter to the Guardian. How can we possibly deal with what’s coming within the fiscal rules. We could not do s in 2008 and the fact that left of centre journalists sneer at and misrepresent MMT is beyond belief. Do they expect us all to starve?
It would be impossible to do this within fiscal rules.