Global Disruptions Due to Trump’s War

Disrupting the Global Economy and Iran is Doing Quite Well

Aluminum Disruptions Due to Bombing, Construction Physics

The world’s largest aluminum smelter in Bahrain was hit by an Iranian drone, bringing production offline. [Bloomberg] Other aluminum smelters in the area have cut production due to inability to ship through the Strait. This, in turn, has forced various EV manufacturers to cut production. “Gulf smelters that supply Toyota, Nissan, BMW, parts makers for Mercedes-Benz, South Korea’s Hyundai Mobis and hundreds of other automotive customers worldwide are defaulting on contracts or closing down. The U.S.-Iran war has effectively shut the Strait of Hormuz to commercial shipping, cutting off one of the largest flows of automotive-grade aluminum.” [Rest of World]

Israel bombed two Iranian steel factories. [NYT] The US bombed an Iranian bridge that was one of the largest in the Middle East. [BBC] And another Amazon data center was damaged by an Iranian drone. [Reuters]

The Philippines declares a National Energy Emergency. [Reuters] And Germany considers ramping up coal power to avert an energy crisis. [Politico]

Helium production in Qatar, which is responsible for roughly 1/3rd of the world’s supply, has been shut down. [NYT] We’ve previously noted that helium is a critical input for semiconductor manufacturing and MRI machines, but it’s apparently also crucial for mass spectrometers used in science labs. [X]

The world is running out of ways to deal with the disruption to oil supply that don’t involve using less oil. “In the first days of this war, the strait’s closure meant the immediate loss of 20 million daily barrels of crude and refined products. The industry went to work, activating a first layer of defense: using up stocks. The second layer came soon after as Saudi Arabia and the United Arab Emirates rerouted some exports using bypass pipelines to Red Sea and Gulf of Oman ports. The third defense came from politicians. The richest nations tapped their strategic reserves, injecting millions of barrels into the market. US President Donald Trump also made constant — and effective — verbal interventions. His jawboning about the chance of an end to the fighting helped tame panic buying.” [Bloomberg]

Italy denied US military aircraft permission to land at a base in Sicily for operations against Iran. EuroNews Claims circulating online suggest Italy denied US military aircraft access to the Sigonella base in Sicily for political reasons linked to the war in Iran. However, official statements and reporting from multiple sources indicate the situation is more procedural than political.

Between 27 and 28 March, Italy refused a request from the US military for aircraft to land at the Naval Air Station Sigonella on the island of Sicily in the Mediterranean, before continuing towards the Middle East.

Because Iranian ships can traverse the Strait of Hormuz freely, Iran is actually making more money from oil sales than it was prior to the war. “Iran is now earning nearly twice as much from oil sales each day as it did before American and Israeli bombs started falling on February 28th. It may be pummelled on the battlefield, but the regime is winning the energy war.” [The Economist]. A source with knowledge of Iran’s oil accounting spoke to The Economist. On condition of anonymity.

The source confirms the country is currently exporting 2.4m-2.8m barrels of oil and petroleum products per day (b/d). This includies 1.5m-1.8m b/d of crude. That is the same or more than it did on average last year. It also sells at much higher prices.

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