Markets are nervous. The cause is Israel's surprise attacks on Iranian nuclear infrastructures parallel to the assassination of generals and nuclear scientists.
Iran responded by launching the 'Ascending Lion' operation. Several strategic sites have already been attacked, such as the Dimona nuclear reactor, the financial center of Tel Aviv, the Ministry of Defense, military air bases, the Mossad headquarters, Ben Gurion International Airport, the Port of Haifa, and a gas platform.
Ayatollah Ali Khamenei promised a "severe response":
"Don't think that you have attacked and it's over. No. You have unleashed war. We will not let you get away with it without consequences."
Uncle Sam has hurried since then to assist Benjamin Netanyahu, who fled to Greece. By the way, the Israeli Prime Minister is still under an international arrest warrant from the ICC...
Donald Trump threatened Ali Khamenei with these words:
"We know exactly where the 'supreme leader' is hiding. […] We are not going to eliminate him, at least not yet."
Now there are fears that the United States will provide military support. The Iranian Ministry of Foreign Affairs warned on Wednesday that any U.S. intervention would provoke "total war" in the region.
Iran could decide to increase pressure by closing the Strait of Hormuz, through which 20% of global oil flows transit. That amounts to 20 million barrels per day, representing more than 30% of maritime oil flows.
These geopolitical tensions are a blessing for Bitcoin, as the economic consequences of a pessimistic scenario are very inflationary for the West.
The closure of the Straits of Hormuz and Bab el-Mandeb would be a very inflationary event. Oil prices could rise to $120 a barrel. JPMorgan even mentions a scenario of $130.
Such an oil shock would quickly drive up global food prices. This happened in 2007 after the peak of conventional oil. It resulted in an increase of more than 20% in the FAO food price index. Food prices depend on the rise in fertilizer costs and the fuel needed for transportation.
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