Editor’s Note: The current trajectory of both the war and the economy do NOT point to the fulfillment of concerns in the article below by Michael Snyder. It’s important to understand that because economic sentiment is arguably the most powerful influencer when it comes to fiscal realities. With that said, we need to be sober and aware of the possibilities, and given the multitude of factors that are at play it would be imprudent to dismiss these concerns outright. Know what they are, but don’t panic just because some people are “projecting” their fears onto us. Here’s Michael…
(The Economic Collapse Blog)—A worst-case scenario could be just weeks away. Traffic through the Strait of Hormuz has been essentially paralyzed by the war with Iran, and there is a lot of speculation that the Houthis could soon bring commercial traffic through the Red Sea to a screeching halt. If such a scenario actually materializes, it would be catastrophic for the global economy.
The good news is that so far we are not witnessing widespread panic among investors. Most of them still seem to believe that this crisis is just temporary. So even though the price of oil is up over 40 percent since the start of the war, the overall global financial system is still relatively stable at this stage…
The S&P 500 is only down 3% so far this year and 5% off its all-time high, still far from reaching bear market territory or even a correction, suggesting investors aren’t panicking yet about the U.S.-Israel war on Iran. But that could change soon.
To be sure, oil prices have soared more than 40% since the war began two weeks ago and are up nearly 70% year to date. But they remain below the peak seen after Russia invaded Ukraine in 2022, despite one-fifth of the world’s oil supplies being bottled up by Iran’s de facto blockade of the Strait of Hormuz.
Of course it certainly wouldn’t take much to push the financial markets over the edge.
Dan Alamariu, the chief geopolitical strategist at Alpine Macro, is warning that if this war with Iran persists we could see “peak war panic” in approximately 1 to 3 weeks…
Alamariu acknowledged there’s a growing chance that the war lasts longer than his two-month outlook, and the Strait of Hormuz would likely remain closed for the duration. That means Brent crude prices will stay above $100 a barrel and possibly even top $150. And yet, the market hasn’t reached maximum panic yet.
“Peak war panic is more likely to hit in the next 1 to 3 weeks,” he predicted. “The longer the conflict lasts, the more investors price in economic damage.”
Using oil prices as a gauge for market panics, crude has historically peaked four to eight weeks into similar conflicts, according to Alamariu. The Iran war has now entered its third week.
If the price of oil surpasses $150 a barrel and stays there for an extended period of time, it will cause widespread panic.
I have no doubt about that at all.
What investors would really like to see is an end to the war, but an end to the war is not even on the horizon at this stage…
Iranian Foreign Minister Abbas Araghchi said Sunday that “we don’t see any reason why we should talk with Americans” as President Trump has claimed Iran is seeking a deal to end the war between the U.S. and Iran.
“We never asked for a ceasefire, and we have never asked even for negotiation,” Araghchi said on “Face the Nation with Margaret Brennan.”
As the war entered its third week, Mr. Trump has claimed in recent days that Iran wants to reach a deal. The president said in a post on Truth Social late Friday that Iran “is totally defeated and wants a deal – But not a deal that I would accept!” On Saturday, he told NBC News that “Iran wants to make a deal, and I don’t want to make it because the terms aren’t good enough yet.”
As long as traffic through the Strait of Hormuz is paralyzed, there is no way that the war will end.
An IDF spokesperson is telling us the the Israelis are gearing up “for at least three more weeks of operations”…
An Israel Defense Forces (IDF) spokesperson said the military is preparing for at least three more weeks of operations against Iran and still has ‘thousands of targets’ remaining.
Brigadier General Effie Defrin told CNN that Israeli forces are coordinating closely with the United States and have plans extending beyond the Jewish holiday of Passover.
‘We have thousands of targets ahead,’ Defrin said. ‘We are ready, in coordination with our US allies, with plans through at least the Jewish holiday of Passover, about three weeks from now.’
Let us hope that the war will be over in just a matter of weeks.
But from where I am sitting, I think that is a very optimistic target.
There are so many ways that this war could become so much worse.
For example, if the Houthis were to shut down commercial traffic through the Red Sea by blocking the Bab el-Mandeb Strait, we really would be facing a nightmare scenario that would be unlike anything we have ever seen before…
Alamariu noted that it’s likely Iran’s Houthi allies in Yemen will try to close the Red Sea to commercial shipping, heaping additional economic pain on top of the closure of the Strait of Hormuz.
“A simultaneous two-strait disruption would compound the shock, impacting the additional ~5 mb/d oil flows that normally transit the Bab el-Mandeb and impairing a main Europe-Asia trade route,” he warned. “This could stoke inflation further, especially in Europe.”
If the Strait of Hormuz and the Bab el-Mandeb Strait were blocked simultaneously, hardly anything would be getting out of Saudi Arabia or other Gulf countries.
I have already written much about oil, natural gas and fertilizer, but so many other industries would be deeply affected as well.
For example, the largest aluminum smelter in the entire world has just been forced to reduce its output…
The world’s largest single-site aluminium smelter in the Middle East cut its output by about 20% on Sunday, marking yet another troubling development for the global economy. The disruption in the Strait of Hormuz is no longer just an energy story – it’s now spreading into industrial metals. These second- and third-order effects could soon disrupt global supply chains and tighten aluminium availability, thus pressuring prices higher.
Bloomberg reports that Aluminium Bahrain (Alba) began a controlled, safe shutdown of three reduction lines on Sunday to preserve business continuity amid heavily disrupted maritime shipping routes through the Hormuz chokepoint.
The global economy has become far more integrated than most people realize.
When the price of oil rises, it rises for everyone.
And the pain is already starting to be felt throughout the entire U.S. economy…
Uber and Lyft drivers told us they’re getting more selective about which rides they accept as gas prices rise. That’s because Uber and Lyft control fares, meaning drivers can’t raise prices when their operating costs go up. Some gig drivers are rejecting shorter, lower-paying trips that burn fuel and instead are chasing longer fares that make the math work.
Meanwhile, EV drivers are having a moment. As gas-powered drivers wince at the pump, electric vehicle owners are taking what some have called a “victory lap.” Charging costs haven’t surged in step with oil prices. This is giving EV drivers, including those on rideshare platforms, a meaningful cost advantage.
Higher gas prices are also playing a role in the return-to-office debate. For people who drive to work, pricier fill-ups mean less money in their pockets for everything else.
“When gas prices spike, commuting effectively becomes a pay cut,” one chief operating officer told us.
If this war keeps going for a while, things will get a lot worse.
Just about everything that we purchase on a regular basis is affected by the price of oil, and that includes food.
It takes energy to grow food, and it takes energy to transport food to the stores.
If the price of oil goes up to $150 a barrel and stays there, it is going to become much more expensive to go to the grocery store.
Already, the average price of ground beef has risen almost 20 percent over the past year…
The average price of ground beef, 100% beef, excluding round, chuck, and sirloin, and excluding preformed patties, finally took a breather in February and barely budged, rising by just 0.2%, after spiking month after month almost uninterrupted for a whole year.
At $6.74 per pound, the average price is up by nearly 20% from a year ago and by 73% from January 2020.
By disrupting traffic through the Strait of Hormuz, the Iranians are hitting us where it hurts.
They know that U.S. consumers do not have a very high tolerance for pain.
So they figure that they can sit back and wait for the pain to reach unendurable levels.
But I don’t think that President Trump is going to end this war until he breaks Iranian control over the Strait of Hormuz.
That could take a while, and so it appears that this crisis will be with us for quite some time.
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.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.