The Oil Shock That Didn't Hurt Enough: Why Economic Resilience May Be Fueling the War
Here's the uncomfortable paradox at the center of the Hormuz crisis: the global economy's improved ability to absorb an oil shock may be exactly what's allowing this war to keep escalating. In past Middle East conflicts, the fear of economic catastrophe acted as a brake on leaders in Washington, Tehran, and Gulf capitals. That brake is weaker now — and the Financial Times warns the cushion could 'prompt reckless political choices.'
Bottom Line
THE BOTTOM LINE: The good news is that the global economy has so far absorbed the Hormuz shock without breaking. The bad news is that this very resilience removes a historical restraint on escalation — leaders who don't fear an oil crisis have less incentive to avoid one. With Houthi threats to the Red Sea growing, civilian infrastructure in Kuwait already hit, and refining capacity leaving no slack in fuel markets, the cushion protecting consumers is being tested from multiple directions at once. Resilience bought time; it did not buy safety.