The Iranians have seized the Advantage Sweet, a Turkish-owned oil tanker carrying roughly 800,000 barrels of Crude. The press release (or should I say ‘slap on the wrist’) issued by the US Navy should have the Chinese very concerned about their supply lines.

Since World War II, the US has patrolled the sea lanes and enabled the safe flow of international resources and products. However, this incident is just another indication that the US is slowly stepping away from its commitment to the maritime order of protecting the high seas.

While the US can just shut down its international energy trade and operate with its neighbors in North America, places like China have much more at stake. Since China falls at the end of a very long supply chain, any disruptions could spell disaster for the Chinese economy; that’s only one of many issues they face.

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Hey everyone. Peter Zeihan coming to you from Colorado. It is the 27th of April. You’ll be seeing this the morning of the 28th. The news that just came out is that the Iranians have snagged another tanker, a vessel called the Advantage Sweet, which is a SuezMax oil tanker, which means it probably is carrying about 800,000 barrels of crude. It is owned by a Turkish company and is registered in the Marshall Islands.

The U.S. Navy has issued a press release basically saying bad Iran, very, very bad Iran. And that’s it. This is your periodic reminder that when it comes to international energy markets, the U.S. just doesn’t care anymore. And if somebody wants to deal with Iran seizing tankers, then they will have to do it without the United States. This is a big change, of course in most people’s perceptions, especially compared to the policy sets that we have seen in the United States for the last several decades. But remember why those policy sets have existed. It’s not that the United States imports a lot of oil from the Middle East. It doesn’t, it really never has, but its allies do. And the entire basis of the American post-World War II global environment was that we will fight wars to protect resource flows and product flows so that “you” will sublimate your military needs to us. Basically, we will fight your economic war. So you don’t have to. And that gives us a free hand in control of your militaries in case of a confrontation with the Soviet Union. The Russians may be coming back in a big way, but they are not the Soviets and they do not have a global position. And so the United States, bit by bit under Obama, under Biden, under Trump, have all basically steadily reduced the American commitment to the maritime order that allows global trade and global energy markets to work. And so this Advantage Sweet, this tanker that’s been gone, the U.S. really doesn’t care.

But if you’re China, this is a problem because the entire existence of the Chinese economy and its strategic position is based on the idea that the United States, no matter what else happens, no matter what the Chinese do, no matter how much military action China carries out, that the Americans will still uphold civilian freedom of the seas. And as we’ve seen today, again, the U.S. has no interest in that anymore. So next time we do get a meaningful interruption to international energy flows, the United States basically closes its borders to energy trade. It’s self-sufficient within North America. And the Chinese are at the very end of a very long supply line that they have no hope of protecting. And that means they’ll deindustrialize. And that means it’s the end of China’s unified nation state. And of course, if you’ve been following me for a while, you know that that’s only one of the many reasons why the Chinese are going to end this decade.

Alright. That’s it for me. Till next time.

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