Aftershock

Buckle up. Donald Trump appears bent on dealing the global economy the same shock we experienced last March.

Over nearly a week, US military forces have been conducting heavy bombardment of Iran’s military facilities and key ports. The peace document signed with great fanfare just weeks ago is now a worthless piece of paper. Trump said so himself.

The massive bombing campaign being waged by the US is concentrated along the Iranian coast, facing the Persian Gulf. Iran’s southern Chabahar Port has been extensively damaged.

Iran is taking casualties from these attacks. Even as they do so, Trump is suggesting that the 168 schoolgirls killed by a US missile at the start of the war could be AI-generated. Washington appears reluctant to do a full investigation of this terrible incident.

Several news organizations report that Trump is considering several options involving direct military operations on Iranian soil. The most controversial among these options is an invasion of Kharg island.

About 90 percent of Iranian oil exports are processed and loaded onto tankers on Kharg. Invading this island will certainly require a certain boldness. It will be perilous. The invasion force will contend with intense bombardment from the Iranian mainland. The oil refining facilities will surely suffer extensive damage – further complicating global oil supplies.

With Chabahar Port heavily damaged by American bombardment and given the prospect of an invasion of Kharg, East Asian oil supplies will be severely threatened. Most of China’s oil imports come from Iran. India and Southeast Asia rely on dark fleet oil deliveries coming from Iran.

Beyond this, we know that Iran will certainly retaliate by attacking oil refineries in its neighboring countries. This will further imperil global oil supply. Damaged refineries will require months, even years, to repair.

Although unrelated to the Middle East theater of war, Ukrainian attacks on Russian oil facilities and on its tanker fleet have reduced Russia’s capacity to export oil – at any price. This aggravates the potential loss of global oil supplies should the US continue its bombardment of Iran.

In the past, military spokesmen normally brief journalists about the strategy and prospects of an ongoing operation. This time, despite the intensity of the bombardment being undertaken, Washington has not bothered to keep the world informed. We know more about the “testosterone tests” the US Defense Secretary is obsessed about that anything about the actual scale of the current offensive against Iran.

The only relatively official statement about the bombardment of Iran is that it is meant to “degrade” that country’s ability to threaten shipping in the Persian Gulf. If that is the strategy, it is naive. Whoever is making the big decisions about this bombing campaign does not seem to have a clear idea about how long the Iranian coast is and how heavily protected it is by Iranian military forces. These forces are deeply entrenched along the tall mountain range overlooking the Persian Gulf.

In addition, western intelligence services estimate that Iran has rebuilt its missile and drone strength to what it was before the US and Israel began attacking last Feb. 28. Tehran should be able to sustain missile and drone attacks on US military bases in the region for weeks of intense armed confrontation.

This is not a new war. It is a strong aftershock of the first one – the one that remains inconclusive. We do not know how long this new round of bombardment will last. We only know it cannot last indefinitely, given the shortages in US armaments.

As it always does, the world knows about the extent of American bombardment only because oil prices have spiked. The same traumatic global economic effects we experienced during the first round of this undeclared war when oil prices rose to about $140 per barrel.

There is one important difference. When oil prices spiked last March, countries with large strategic petroleum reserves, such as the US, were able to somehow manage pricing by releasing oil from the stockpiles. Today, those strategic reserves are severely depleted. There is almost nothing left to cushion a new round of price spikes.

And prices have already been rising sharply. Next week, Filipino motorists are in for yet another price shock.

Our inflation rate slightly moderated last month because transport costs have eased. Transport costs will kick up once more as a direct consequence of the current American bombardment of Iran. Should Trump decide to invade Kharg island, oil prices could rise higher than they did last March.

As a result, our inflation rate will return to the alarming levels it did two months ago. The Philippines was the worst hit by the price shocks that happened last March. We will be the worst hit again.

We saw how vulnerable we were last March because we had no petroleum stockpile to speak of. Only Petron has a refinery – significant in the event we might have to import crude from the Russian far east.

Our energy officials promised to build some semblance of a strategic petroleum reserve to prevent a repeat of the supply panic we experienced March and April. But nothing was done yet. Congress has not appropriated the funds to make this a reality. Everybody’s busy trying to oust the Vice President. We want a circus, not a strategic reserve.

Meanwhile, we are not getting fertilizers to help us feed ourselves.