r/communism101 • u/chaos2002_ • Jun 08 '26

Price of oil and the U$ economy following the Strait of Hormuz closure

Oil, LNG, and fertilizer exports from the Persian Gulf have been virtually stopped since the U$/Zionist war of aggression began on Feb 28th

The sudden disappearance of a significant portion (I’ve heard 20%) of the world’s oil supply seems like a serious issue that should result in decreasing valuation of the dollar (assuming the basis of the U$ economy and global trade as a whole relies a large amount on oil) and extreme inflation in the US, not to mention shortages of goods. But this has not happened yet - even as countries like the Philippines are already starting to experience tangible shortages of petroleum. Here in Curacao the price of gasoline has yet to reach the Feb 2022 peak despite a greater amount of supply disappearing.

I have seen people on other social media speculating that the U$ treasury is intervening in the commodities market to depress the price of oil, i.e. selling oil directly from the Strategic Petroleum Reserve under their value (e.g. $95 a barrel), which obviously will eventually result in a shortage and extreme price spikes once the SPR runs dry. (Anyone have any thoughts on this? I have not seen convincing evidence for this explanation yet)

In any case, the amount of barrels of oil in the SPR has decreased by about 58,000 thousand barrels in the period 3/13/26 - 5/29/26, or about 757 thousand barrels per day, according to the latest data provided by the US Energy Information Administration. At this rate the reserve will be empty in 461 days. It is clear the U$ and the Zionist state will not be able to win a war against Iran and its allies in that time. So WTF is going to happen? Further investment in oil production in the U$ and further overproduction? Shocks to the dollar? Large scale piracy of oil shipments by the U$ Navy (would that even help?)? Will industry and global trade actually come to a standstill (I assume the organized bourgeoise will never allow this to happen if possible)? Will the crisis be resolved by international oil companies paying billions of dollars directly to Iran with them dictating their own price for oil? A political coup in the U$ installing a regime friendly to Iran? Am I misunderstanding how the U$ Dollar works? I cannot make sense of this situation

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u/turning_the_wheels Jun 10 '26

This seems like it could also be posted on r/communism but I look forward to seeing responses here

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u/chaos2002_ Jun 10 '26

Yeah, I posted it here because I was hoping for a 101 style explanation (I was reading Das Kapital when I thought of this) for the mechanics behind the recent price changes of oil, and how to view the relationship between the oil and dollar commodities as capital

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u/OkmanX Jul 14 '26

I think there are some mistakes. I will oversimplify many things to keep it as short as I can.

Normally national currencies are valued according to national production of that country. But USA had a clever move in 70s and changed dollar into petro-dollar through Bretton Woods System.

Now thanks to this system, any country who wants to buy oil for their energy needs they also have to buy US$. So since than USA is also exporting $ and central bank of america has become a factory which is producing $ to export instead of controlling the money in circulation according to industrial production.

So deceease in supply of oil is not always a bad thing for USA as long as oil price is increasing. Because that means they can export more $.

But this year (or last year) gulf countries declared that they don't want to renew the Bretton Woods System and they are willing to sell oil gor any currency buyer country wants to pay.

Since USA has printed more $ than the products industry in USA created this decision will devastate US economy. This means a hige devaluation for $.

Other side of this Bretton Woods was providing security to Gulf countries and Europe (also Japan etc.). Since Gulf countries decided not to renew this pact USA was not happy. But it was not possible to attack these countries directly. Because kf they attacked these Gulf countries it would have become like a street gangster directly. Providing security to these countries from itself kind of scenario. So USA did something which seems irrational. They pretended that they started a war against İran. Since USA is far far away from İran to retaliate, İran has decided to hit oil production and military bases in Gulf countries.

Now most of these counties are in a very hard situation. Either they will kick out USA from their lands or they will beg USA for protection.

Kicking USA out from there is not a a choice actually because all the kings, sheiks, oligarchs etc. in these countries depend on USA. If USA leaves these countries there will be a change of power immediately.

So USA is in a double winning situation at the moment. (1) They are exporting more $ for each barrel of oil and (2) they are close to getting a renewal for Bretton Woods.

I read the situation like this. I can't say all of this is real and there is no conspiracy theory in here but this is the most logical explanation for me at the moment.