alt Hacker NewsOil going through Hormuz is 20%, not 80% of global supply. It's true that demand is pretty inelastic, but it's not like it can't be cut at all.
Oil going through Hormuz is 20%, not 80% of global supply. It's true that demand is pretty inelastic, but it's not like it can't be cut at all.
Who mentioned 80%?
During the 1973–74 Arab oil embargo, the disruption removed approximately 4.5 million barrels per day (mb/d) from the market, which constituted about 7% of the global oil supply at the time. This disruption significantly impacted global supplies.
20% is a lot more than 7%. This could be worse than 1973-74. As a 10year-old in 1973 I remember spending a lot of time in the backseat of the station wagon as we were waiting line line for gas.
For context, during the first COVID spring (March-June 2020) oil demand fell by 20%. Because nobody was driving or flying anywhere. That's what it took to cut 20%.