Iran’s blockade of the Strait of Hormuz is no longer a distant conflict. It’s at the pump, where California drivers now pay over $7 a gallon. The shockwave from Tehran’s closure has shattered the illusion of US energy insulation. Despite record domestic production, global buyers are outbidding American consumers for every available barrel.
Peter St Onge reports 171 oil tankers - 28 of them supertankers - are steaming toward the US, carrying 200 million barrels of crude worth $20 billion. This volume is six times the normal flow and nearly two months of US supply. The Gulf of Mexico has become the world’s emergency gas station. Yet even with US exports surging from 3.9 to 5.2 million barrels daily, prices keep climbing because European and Chinese buyers pay premiums for stability.
"The US is now the world’s emergency gas station."
- Peter St Onge, Peter St Onge Podcast
The economic fallout is cascading. Goldman Sachs forecasts 10,000 US jobs lost per month from energy costs. In the Northeast, gas demand has dropped 4.3% in a single month as drivers hit their breaking point. The Strait remains heavily mined - clearing it would take six months - making this disruption structural, not temporary.
Blue states are responding with desperation. California proposes a 5% one-time exit tax on billionaires and a 1.5% annual wealth tax on net worth, targeting unrealized gains. New York eyes a 9% exit tax. These moves aim to trap $700 billion in assets - equal to Switzerland’s GDP - that have already fled. But Peter St Onge warns this creates a Detroit-style doom loop: when the wealthy leave, the tax base evaporates, forcing higher rates on those left behind.
"High-income residents are increasingly viewed as livestock in a state-run slaughterhouse."
- Peter St Onge, Peter St Onge Podcast
Meanwhile, the Pentagon’s strategic miscalculation is exposed. Eleven US bases suffered billions in damage from Iranian strikes, including a Vietnam-era F-5 breaching air defenses to bomb Kuwait. The US has burned through advanced munitions, with replacements taking five to eight years. Confidence in American military invincibility has cracked - along with the diplomatic off-ramp, now that Iran has abandoned US-aligned mediation.
The empire’s cost is no longer abstract. It’s the $30 million government grocery store in East Harlem - four times the cost of a private one - or the Irish government surviving a no-confidence vote after diesel prices jumped 20%. The political realignment has begun. In Germany, the AfD leads polls. In Britain, Reform UK has a 41% chance of forming the next government. The energy crisis isn’t just economic. It’s existential.
