The Global Economy Is Literally Being Choked (w/ Sal Mercogliano)

Summary

Bulwark Takes: The Global Economy Is Literally Being Choked

Host: Andrew Egger
Guest: Sal Mercogliano (Maritime historian, professor, former merchant mariner, and host of "What's Going on with Shipping")
Date: March 21, 2026

---

Episode Overview

This episode dives into the economic and human fallout from the Strait of Hormuz crisis sparked by the ongoing US/Israel-Iran conflict. Maritime expert Sal Mercogliano joins host Andrew Egger to explain just how disruptive the chokehold on one of the world’s most vital shipping lanes has been—and what this means for the global economy, energy prices, and thousands of seafarers stranded in the region.

---

Key Discussion Points and Insights

1. The Vital Role of the Strait of Hormuz

[02:11] Sal Mercogliano:

• Describes Strait of Hormuz as a “classic maritime choke point.”
• Around 135 ships, primarily tankers carrying oil and liquefied gases, transit daily.
• “About 25% of global trade goes through this narrow little choke point.”
• The recent conflict has “choked off” this artery of trade.

2. How Iran Has Seized (Economic) Control

[03:22] Sal Mercogliano:

• Traffic plummeted from 130+ ships a day to single digits post-conflict.
• Now, only ships Iran allows (or those paying reported $2 million bribes) are passing—mostly from countries like China, India, and Pakistan.
• Ships detour into Iranian territorial waters, “tells us that Iran is basically inspecting these ships, clearing these ships.”
• “Iran controls the Strait of Hormuz now. They're controlling who's going in and who’s coming out.”

3. Military Supremacy vs. Economic Reality

[04:32–06:22] Andrew Egger & Sal Mercogliano:

• Despite US/Israeli airpower, Iran controls commercial movement.
• US has “impressive” military presence, but lacks enough ships for secure escorts.
• “We haven't gotten the right mix of vessels … we don’t have enough of them over there.”
• Lessons from Ukraine (Black Sea) and Houthis (Red Sea): Modern anti-ship warfare doesn’t require a navy—threats like drones and mines suffice to paralyze shipping.
• “The gnats can get everywhere. They're really hard to hit and it's almost impossible to get all of them.” [Sal, 07:42]

4. The Risks Facing Shipping and Mariner Psyche

[08:45] Sal Mercogliano:

• US military is skilled at shooting down threats, but even “1% risk” is too much for commercial shippers transporting volatile cargo.
• “If you tell a commercial shipping guy, there's a 99% chance you're going to get through. What they hear is there's a 1% I'm not going to get through. How do I minimize the downside of that?”

5. The Growing Humanitarian Crisis for Seafarers

[12:01] Sal Mercogliano:

• 3,200 ships, 20,000 seafarers currently stranded.
• Ships running low on water, food, and fuel—many not permitted to dock or resupply.
• “Received a note from one seafarer … their water maker … was out and the ship was out of water. … They were begging to go into port to get water and the port refused them.”
• Crews now call themselves the “Yellow Fleet”—a reference to ships stranded in the Suez Canal during the 1968 Six-Day War.

6. Contradictory US Policy Toward Iranian Oil

[14:29] Sal Mercogliano:

• US seized tankers carrying Venezuelan oil, but is now allowing Iranian oil through to stabilize prices.
• “We want that Iranian oil on the global market to make up for the shortfall. … Which is just the most confusing policy out there.”
• Seizing Iranian tankers could have been a leverage point, but hasn’t been used.

7. Domestic Politics and Economic Trade-offs

[16:35–18:04] Andrew Egger & Sal Mercogliano:

• President says “we don’t use the Strait, we don’t need it”—but US is still deeply affected via global supply chains.
• US avoids a ground presence due to domestic aversion, preferring airstrikes.
• Letting Iranian oil through keeps prices down, despite empowering Iran financially.

8. Wider Economic Fallout and the Global “Bloodstream”

[18:04–21:07] Sal Mercogliano:

• Despite US not importing much directly from the Gulf, global interconnectedness means any disruption impacts everyone.
• “We don’t live in an isolated world where you can choke off 25% of global trade and don’t think it affects the rest of the world.”
• Uses analogy: “What we’ve done is put a clamp on a femoral artery and we’ve choked off 25% of the blood flow.”

9. If the Strait Remains Closed…

[21:07] Sal Mercogliano:

• “You’re talking about bankrupting Bahrain, Qatar, Oman, Kuwait. Saudi is going to be crippled … Uae, I mean, these are economies that are, that are huge energy demands. There's not enough energy to meet this.”
• Short-term supply can be replaced by stored reserves, but those are running out.
• Full normalization could take months—even if the crisis ended tomorrow: “It takes you a week to fix a one day massive disruption. We're 21 days into this. You're talking about 21 weeks.”
• Continued closure would require global trade to “rewrite how we do trade on a global scale” (recalls supertanker innovation post-1968 Suez closure).

---

Notable Quotes & Memorable Moments

• On Iran’s leverage:
  “Iran controls the Strait of Hormuz now. They're controlling who's going in and who's coming out.”
  – Sal Mercogliano [04:09]

• On military vs. shipping realities:
  “If you tell a commercial shipping guy, there's a 99% chance you're going to get through. What they hear is there's a 1% I'm not going to get through.”
  – Sal Mercogliano [09:18]

• On mariners’ plight:
  “They're starting to call themselves the Yellow Fleet. … Back during the Six Day War … the Suez Canal closed, there was a fleet of ships that got stuck … for years, and the ships turned yellow from the dust, and they're worried about becoming a new version of that.”
  – Sal Mercogliano [12:54]

• On economic isolationism:
  “We live in a global world that's interconnected. If you cut off 20% of global oil … that's got to come from somewhere else.”
  – Sal Mercogliano [18:17]

• On long-term consequences:
  “If you go further than a month out, I don't know, you're talking about restructuring the global trade patterns of the planet, which literally only happens during world wars.”
  – Sal Mercogliano [22:53]

---

Important Timestamps

• 02:11 – What makes Strait of Hormuz strategically unique
• 03:22 – Iran’s de-facto control & ship passage bribes
• 04:32 – Paradox of military power vs. economic impact
• 06:39 – The technological threat: drones, mines, speedboats
• 08:45 – Shipping insurers’ calculus and “acceptable risk”
• 12:01 – Humanitarian crisis for stranded crews ("Yellow Fleet")
• 14:29 – Confusion and contradictions in US oil policy
• 18:04 – Why the US does care about the Strait
• 21:07 – What if the crisis drags on for 1-6 months?
• 24:10 – The “bloodstream” analogy—how supply chains react
• 25:42 – Closing optimism: “human beings are very resolute”

---

Tone and Language

Conversational, fast-moving, occasionally darkly humorous but serious, with both Egger’s incredulity and Mercogliano’s clear, expert, but sometimes bleak analysis. The discussion zeroes in on how policy, logistics, and lived experience intersect in a high-stakes global crisis.

---

Closing Thoughts

Mercogliano ends with a touch of optimism despite the gravity of the situation:

"Global shipping has been challenged in the past … we will overcome this. I think the Trump administration underestimated the situation...it's going to take a concentrated effort to do it. But … I tend to be optimistic, not pessimistic."
– Sal Mercogliano [25:53]

---

For more, follow Sal Mercogliano's channel "What's Going on with Shipping" and the Bulwark team at thebulwark.com.

Transcript

[Bleacher Report Announcer]

The Bleacher Report app is your destination for sports right now. The NBA is heating up, March Madness is here and MLB is almost back. Every day there's a new headline, a new highlight, a new moment you've got to see for yourself. That's why I stay locked in with the Bleacher Report app. For me, it's about staying connected to my sports. I can follow the teams I care about, get real time scores, breaking news and highlights all in one place. Download the Bleacher Report app today so you never miss a moment.

[Sal Mercogliano]

What's up foos?

[Main Event J Uso]

Main Event J uso here from the wwe. When it's just me between matches, it's day one ish. And that means it's Chumba Time. With hundreds of casino style games and new titles arriving weekly, there's always something fresh to try at Chumba Casino. The Daily Boost make it even more fun and have me bout to get em all during my downtime. Ready for a fun way to chill out and enjoy a few minutes for yourself? Let's chomp.

[Andrew Egger]

No purchase necessary VGW Group Void where Prohibited by law CTS and C's 21+ Sponsored by Chumba Casino hi guys, this is Andrew Egger with the Bulwark. Welcome to Bulwark Takes. If you had not heard of the Strait of Hormuz before this month, you probably have now. Iran's choke point on this passage, which is what connects the Persian Gulf to the Gulf of Oman and beyond that to the Indian Ocean. It's been responsible for not all but most of the economic disruption that we have already seen just three weeks into America and Israel's war on Iran. You've almost certainly heard that much, but this is really one of those stories that kind of gets crazier the closer at it you look. So to walk us through some of the ins and outs of the straight of Hormuz crisis, I am very pleased to be joined by maybe the best guy there is on this subject, Sal Mercogliano. He is a historian, he's a former merchant mariner, he's a professor of maritime industry policy, and you may perhaps have stumbled upon him recently or a while ago on his YouTube show what's Going on with Shipping, which I have been a new convert to for perhaps good reason just this week as we have been weathering this particular crisis. So Sal, thanks for coming onto the show.

[Sal Mercogliano]

Andrew, thanks for having me. Big fan of the Bulwark.

[Andrew Egger]

Oh that's so nice of you to say. Why don't you just start by setting the table for us here. What does normal peacetime function look like in the Strait of Hormuz? Who's going through there and why is it important for the economy?

[Sal Mercogliano]

Yeah, so straight Hormuz is a classic maritime choke point. A little narrow pinch in the ocean where commerce and trade. So it's not the busiest place on the planet. You know, that's the English Channel, the Strait of Malacca, the Taiwan strait. But about 135 ships a day go through there. Big energy ships. We're talking about tankers, liquefied natural gas, liquefied petroleum gas or carriers, you name it. It's just, it's a mesh. About 25% of global trade goes through this narrow little choke point. And what we've seen happen is that choke point has gotten choked off.

[Andrew Egger]

Yeah. So let's talk about that in the opening days of the war. I mean, it seems like this dawned on the President very quickly. And of course, you know, this is something they had had in the back of their minds in of possible war with Iran forever, that this is something Iran could in theory do. Very quickly it became clear Iran was grinding all traffic to a halt through this strait. In the last week or so, though, that story seems like it started to change a bit. More vessels are making it through. The problem is it's mostly the ones that Iran wants to let through. Can you talk about kind of the new status quo that Iran is sort of imposing on the strait in the last few days here?

[Sal Mercogliano]

Yeah. So, I mean, we had a kind of shutdown with this. And again, we went from 130something vessels going through the just, you know, single digits in some cases until a complete stop there for a brief period. And right now what we're seeing is that countries are going to Iran. We're hearing about China, India, Pakistan, maybe a few others going to Iran and getting kind of permission to run their ships through. And what we're seeing is ships sailing out of the Strait of Hormuz, but not through the normal strait. There's a trap we call traffic separation scheme right down the middle of the strait. It's kind of like a highway where you go to one side, just like a center divider. But instead these ships are routing all the way up into Iranian waters between two islands and then coming out through Iranian territorial waters. And that tells us that Iran is basically inspecting these ships, clearing these ships, and we actually suspect they may be paying to go through maybe as much as $2 million a ship to go through. And what basically has happened here, one of the objectives for the Trump administration was to ensure that Iran doesn't control the Strait of Hormuz. Well, Iran controls the Strait of Hormuz now. They're controlling who's going in and who's coming out.

[Andrew Egger]

This is one of the things that has just completely boggled my mind because by every indication that we have, I mean, it is actually true that militarily, you know, we have a real stranglehold on the strait right now, on Iran right now. I mean, we really do. We are actually exerting military supremacy basically over that whole region. We're flying we wherever we want to. We're hitting the things that we want to hit. And yet Iran has much more economic control over the traffic through that strait than they have ever had in the past. I mean, what's the, what's the disconnect here? Why is this like weird asynchronicity the way it is right now?

[Sal Mercogliano]

Well, I would say two things. Number one, the Trump administration has a series of objectives. And unfortunately, keeping the strait open is toward the bottom of that list of objectives. And even though we have an impressive military force over there, we don't have enough to do all those missions concurrently, especially in the case of escorts. I mean, there's just not enough vessels in the US Navy deployed over there to do it. And plus, we've been kind of sandwiched with the past 20 years of poor shipbuilding programs. We haven't gotten the right mix of vessels. We got some very good high end vessels like Arleigh Burke class destroyers, but they're $2 billion apiece and we don't have enough of them over there. On the flip side of that, Andrew, one of the things we've seen since 2022 in the Black Sea and 2024 in the Red Sea, you don't need a navy to exert an anti ship campaign. The Ukrainians have demonstrated this against the Russians with absolutely no navy. And the Houthis have done it against global shipping for the past two years. So even, you know, what Secretary Hegseth says is, you know, we're going to give the Iranian navy their half. The bottom half doesn't matter because you don't need a navy. It's just a threat. Either unmanned aerial or uncrewed surface vessels, drones, even the threat of mines, for example, is enough to cause havoc among shipping. And that's exactly what we're seeing. Over 20 ships have been attacked so far since March 1st.

[Andrew Egger]

Yeah. Can you actually expand on that a little bit about what the, what the specific logistics of What Iran is using to keep the strait bottled up are, and why it is that, you know, it's difficult for at least the sorts of military pressures that, that America has brought to bear so far to. To prevent that.

[Sal Mercogliano]

Yeah. So what we see the Iranians using is, is a kind of a variety of weapons. They really haven't brought the one we think they were going to bring in the full bear, which is they're either guided missiles or ballistic missiles. We think because the US has done a good job in basically targeting them and really knocking them out, they have basically focused on them. We think maybe one or two ships early on were hit by something like that. The vast majority of what we see them using are these unmanned aerial vehicles, kind of the Shahid drones, which are these big huge kite things with basically a moped motor on the back of them. And then unmanned surface vessels, which are basically remote control speedboats that they literally drive out with a human crew on board. They get close to a vessel, hop off, and then remote control them. Almost Wile E. Coyote into the side of a vessel. But it's effective and we're seeing that. Unfortunately, we've seen at least eight merchant mariners killed, several ships not sunk, but extremely damaged, that we had a burnt out tanker off the coast of Basra in Iraq. We had a Thai bulker lose three crew members with an engine room fire. So I would argue that one of the things that the US Navy is prepared to do is like kind of counter, you know, the flock of geese coming at you. They're good to shoot down the flock of geese. What the problem is, is the Iranians aren't coming with a flock of geese. They're coming with a horde of gnats. And the gnats can get everywhere. They're really hard to hit and it's almost impossible to get all of them. And that's what we're seeing right now.

[Andrew Egger]

Yeah, that's a great analogy and kind of a horrifying analogy at the same time when it comes to, you know, maybe there's a silver lining here. Maybe it doesn't count as a silver lining. The fact that they have actually, you know, sort of succeeded in destroying a lot of that missile capacity and things like that. I mean, presumably it is worse for one of these giant vessels to be hit by a cruise missile than to be hit by, you know, basically a speedboat driving into the side of the thing. But perhaps it's not really like a meaningful difference when it comes to just sort of the risk assessments for these, for these Boats. I mean, like, is, is it basically the case that as long as Iran can do any of the vast majority of these ships are just not going to, not going to risk it? Is that basically the situation we're looking at here?

[Sal Mercogliano]

Yeah. So, you know, I was very critical of both the Biden and Trump administration when they did the Red Sea operations. The Biden administration did it early in 2023 and 2024 when the Red Sea shut down. And you had Operation Prosperity Guardian and Poseidon Archer where they attacked the Houthi. And then later on President Trump did Operation Rough Rider. And one of the things we found out was first off, the US Military is really good at shooting down drones and missiles. And they, you know, had a, almost a near perfect record of doing that. The problem was the US military considers a 99% success rate, you know, a mission kill. It's great, it's slam dunk. If you tell a military guy you got a 99% chance of success, they're going to do it in a minute. If you tell a commercial shipping guy, there's a 99% chance you're going to get through. What they hear is there's a 1% I'm not going to get through. How do I minimize the downside of that? That's my concern. And you know, if I'm on a liquefied natural gas carrier which is carrying natural gas at minus, you know, 250 degrees Fahrenheit and you're going through and you get hit by one of these weapons, you're basically on a floating bomb. And you know, that's not really where I want to be. And what I need is security. I need to be ensured that that 1% isn't getting through. But it's so hard to ensure. The 1%.

[Pocket Hose Advertiser]

This episode of Bulwark Takes is brought to you by Pocket Hose, the world's number one expandable hose. Old fashioned hoses get kinks and creases at the spigots, but the Copperhead's pocket pivot swivels 360 degrees for full water flow and freedom to water with ease all around your home. When you're all done, this rust proof anti burst hose shrinks back down to pocket size for effortless handling and tidy storage. The new pocket hose, copper head and pocket pivot is a total game changer, especially with the spring coming right up. I know how much garden hoses can feel like a waste of space in your shed or your garage. This hose goes from pocket size to full size in seconds. It's amazing. But what really blew my mind, when you're done, it actually shrinks itself back down and coils up like magic. There's no winding, no hassle. Seeing it on TV was cool, but trust me, using it in real life, even better. My flowers love it. After trying the pocket hose, I'm never going back. This hose is so lightweight and durable. Watering the yard is a dream. For a limited time, my listeners can get a free pocket Pivot and their 10 pattern sprayer with the purchase of any size copperhead hose. Just Text takes to 64,000. That's takes to 64,000 for your two free gifts with purchases. Takes to 64,000. Message and data rates may apply. See terms for details.

[Andrew Egger]

I want to talk a little bit about the ships that are getting through here in a minute, but just on that topic, one thing I've been really struck by listening to your show this week is obviously it's easy for everybody to kind of think about the hit to their own pocketbooks sitting here in America from all of this stuff that's going on, but just the human element of the people on the ships. I mean, there are a lot of people, thousands of crews is my understanding, bottled up in the Persian Gulf right now who can't dock and they can't leave. I mean, can you just talk about what the, what the kind of situation is on the ground for all of these crews right now?

[Sal Mercogliano]

Yeah, I mean, it's so easy to be very abstract when we talk about war and not talk about civilians in Iran and what they're going through, but on board ships. And it's the thing I've been talking about a lot because I've been talking to some of the crews out there. You know, we estimate the International Maritime organization is estimated 3,200 ships in the Persian Gulf with about 20,000 seafarers on board. And I received a note from one seafarer who talked about an encounter with a ship that they had a problem on board. Their water maker, their purifier was out and the ship was out of water. I mean, they just literally out of water. And they were begging to go into port to get water and the port refused them. They didn't want them in port because they didn't want a target coming in. And this, this mariner along with others out there are telling me, listen, we, we came in here three weeks ago, we're 22, 23 people on board. We don't have enough food. I mean, we just don't have enough food. Because we're running low on stores. We replenish when we go into port. Port, we get, you know, how often do you go to the grocery and get food? You know, and then, you know, you prepare for long voyages, but you plan on resupply at periodic points. Ships are running out of fuel. I mean, they're just running out of fuel. And the concern here is a humanitarian crisis that goes on. They're starting to call themselves the Yellow Fleet. And the reason they use that term is back during the Six Day War when, back in 1968 when, when the Suez Canal closed, there was a fleet of ships that got stuck in the Suez Canal. And they were there for years, and the ships turned yellow from the dust, and they're worried about becoming a new version of that, stuck inside the Strait of Hormuz, kind of corked in the bottle.

[Andrew Egger]

I mean, it's just such a. Such a crazy situation. Let's talk a little bit now about the exception to the rule, which are some of these ships that we have started to see get through, apparently on, you know, with the blessing of Iran. And these are ships that are, you know, either Iranian ships themselves or they. They are. They're flagged by Iranian allies. And it does actually appear that Iran is just sort of has carte blanche and who gets in and who gets out. And they've actually begun to, to, you know, operationalize that in the last few days. Obviously, you know, you don't need that much material to stop all these other ships from getting out. But that cuts both ways, right? I mean, in theory, the United States could be also blocking Iranian ships from getting out under ordinary American economic policy. Iranian oil is not supposed to be being sold around the world to begin with. Right. So can you just talk a little bit about the posture that the US has taken here in terms of economic policy toward. Toward Iran and this oil that we have seen start to get out of the, of the Persian Gulf here.

[Sal Mercogliano]

Yeah, well, the word I use, Andrew, is confusing. I'm trying to figure it out myself. If you look at US Policy, for example, toward Venezuela, we initiated a takedown of 10 tankers that were carrying Venezuelan oil. I mean, the US military executed this, seized the vessels, brought them into US ports, are in the process of selling off the ship and the oil. Iranian ships are not just sailing out in the ocean. I mean, they're loading at Carg island and Joska Port outside of the Strait of Hormuz, they're loading and sailing out of the straits. And not only are they sailing and out we just had Secretary Bessant come out, the Energy Secretary come out and say, we want that Iranian oil on the global market to make up for the shortfall. That oil that is stuck in the Persian Gulf, which is caused by Iran, which is just the most confusing policy out there. I just can't quite get a handle on it. But it's interesting because I had talked about early on an interesting policy for the US Would have been to seize those Iranian tankers. Minimal crews on board, civilian crews, perfect negotiating tool if you want to end the conflict. Because my concern is how do you end this conflict? What does it look like at the end? Because the fear here is that the Strait of Hormuz becomes kind of like the Red Sea in that it's not clear that it's over yet with the Houthi. Is it clear that it's over with the Iranians? This is the issue with Carg Island. There's not enough troops going to the Persian Gulf to seize Iran by any means, but they can grab Carg Island. But Carg island is, I would argue, could become a hostage in this deal. But bombing Carg island would put Iran in a tough situation because they got nothing to lose at that point. So it's a lot of very high stake oil politics here that they're playing between the Trump administration and Iran right now.

[Andrew Egger]

You mentioned the fear of there never really being a. Get back to a real normal scenario here. And I'm just, my protection producer. Matt here is just sending me, apparently the president, just a few minutes before we started talking, he was asked about some of this stuff. And he said, you know, we don't use the straight. We don't need it.

[Sal Mercogliano]

You know, we don't use the straight. We don't. The United States, we don't need it.

[Andrew Egger]

So that's, that's kind of an interesting little bit of insight into his mind on all of this. But you talk about some of the weird sorts of policies that seem to be at loggerheads with one another. And I do think there's a pretty strong case to be made that this is just them, you know, sort of reacting against one domestic political pressure or another. Right? I mean, if it's, if the question is how do you prevent, you know, some of these sort of smaller scale attacks, one answer would be, well, you, you send in troops and you stop them from, from sort of launching these, these sorts of guerrilla assaults on shipping and things like that, and you sort of occupy the coasts there. And that is, you know, an argument that, that probably would work, at least in the, in the short term for doing some of these things. But it would cross a pretty stark political red line in America where it seems to be the case that Americans, for whatever reason are a lot more comfortable with bombing the shit out of a country from afar than they are with troops on the ground for perhaps good and bad reasons. Or you talk about why are they letting this Iranian oil through? Well, obviously the President, one of the things that he is really concerned about is these upward pressures on global gas prices all over the place. And if it's, if it's a choice between, you know, letting Iran rake in a bunch of money and, and keeping prices somewhat lower and stopping them from doing that and letting prices go even higher, I guess the triangulation that they've made is that, that they're going to just try to keep the, the gas prices pushed down. I mean, does that seem, seem like a fair ish reading of, of at least sort of connecting some of these, some of these dots together?

[Sal Mercogliano]

Well, I mean, what you the way to understand the policy right now? Unsanctioning Russian and Iranian fuel, a 60 day waiver which allows foreign ships to move cargo between US Ports. They're trying to push down the gas crisis. That's exactly what they're trying to do. This is all an effort because while President Trump is exactly right, we don't get a lot of exports out of the Persian Gulf. We live in a global world that's interconnected. And if you cut off 20% of global oil and you cut off 17% of the LNG liquefied natural gas coming out, and you cut off a third of the fertilizer coming out, well, that's got to come from somewhere else. And what we're seeing is that's being pulled out of the United States. We're seeing gasoline being pulled out of the United States, diesel fuel oil, natural gas being pulled out of the United States, which is great for us, it's a great marketplace because we're being able to sell that on the, on the global marketplace. But what means for the consumer is we're seeing gas prices go up higher than, you know, almost ever before. The gas has been the highest in February 2022 when Russia invaded Ukraine because it caused a shock to the system. That's what this is doing right now. We don't live in an isolated world where you can choke off 25% of global trade and don't think it affects the rest of the world. I use the analogy all the time. You look at that big huge map of the world with all ships going through everywhere. And that's like the circulatory system of global trade. What we've done is put a clamp on a femoral artery and we've choked off 25% of the blood flow. If you leave it clamped for a long period of time, you're going to cause permanent damage. And that's the problem we're seeing right now. You gotta get the straight back open. But even if today, Andrew, both President Trump and the new Ayatollah hugged and made up and it was unicorns and rainbows again, shipping companies are gonna look at that. It's like, is this safe to go through again? Cuz it's still. The Ayatollah Trump is still president until 2029. You know, could this happen again? And have we fundamentally restructured the global economy because of this? And I don't know that the Trump administration had that on their list of accomplishments. What they were gonna achieve when they went into Iran, I think this was low down on their order. And if anybody said this in that meeting, they were probably in the back row and probably were afraid to raise their hand.

[Andrew Egger]

Yeah, I mean, you're talking about again, sort of a best case scenario here where not only does this happen, does this reopen tomorrow, but you know, Iran and Israel and we all agree no more hitting energy infrastructure, no more actual permanent damage to just pulling all this stuff up out of the ground to begin with and then, you know, immediately trying to get underway, unsnarling these supply chains. Let me talk, let me ask you about the flip side of that, which is that, you know, CNN reported today the Defense Intelligence Agency had made sort of a preliminary estimate that maybe Iran could keep the strait closed for as long as one to six months. I mean, what kind of a world are we talking about there where this is just closed off? I mean, if six months from now we're finally getting around to reopening the Strait of Hormuz, can we even game that out or what can we say about what the economy would look like under those conditions?

[Sal Mercogliano]

Well, I mean, you're talking about bankrupting Bahrain, Qatar, Oman, Kuwait. You know, Saudi is going to be crippled from this because they can't get the majority of their oil out. Uae, I mean, these are economies that are, that are huge energy demands. There's not enough energy to meet this. So, for example, on the oil issue right now, I argued at the very first week, okay, shutting down oil from out of the straits is not a big deal. Because number one, we've got 100 million barrels of oil afloat sitting off Singapore and Malaysia all the time. Because guess what, we don't flow oil right from an oil well into a refinery. It goes through basically holding tanks. There's always storage out there. But the story that got me today was, hey, that fleet of vessels off of Singapore and Malaysia is going down. If you look at the number of tankers that are loaded, they're decreasing, which means once they go away, you're pulling directly from refineries, you're in a just in time type of, of logistics for oil. And then you start pulling down from reserves in the United States and Japan and China. That creates problems. Now you have energy shortages. You're seeing in Pakistan right now, where we're seeing Pakistan rationing energy right now and power because they were getting fuel out of Saudi Arabia, but they're not getting that fuel out of the Persian Gulf now, which means longer miles. We may have to ship cargo over longer miles, which means we need more tankers, which we don't have. This is going to cause disruptions. And again, for every, you know, the best analogy I have for this, Andrew, is when ever given went sideways in the Suez in March of 2021, pinched off and closed the Suez Canal for six days. 450 ships piled up on each side of the canal. Kind of is just like a cork in a bottle. And then we popped it out and all of a sudden traffic started flowing. It took six weeks to three months to sort that out before the logjam and ports, before everything kind of settled back down from what you did. You know, on a best case estimate, it takes you a week to fix a one day massive disruption. We're 21 days into this. You're talking about 21 weeks. You're talking about a third of a year. It's almost half a year we're getting to before we see this resonate out. If you go further than a month out, I don't know, you're talking about restructuring the global trade patterns of the planet, which literally only happens during world wars. I mean, that's the only time you see it. And when this happens, we change the way we do transportation. When the suez closed in 1968, for eight years we created supertankers because it was more efficient to create these huge behemoth tankers to go around Africa and go to Asia. What do we do now? I don't know. We're going to have to rewrite how we do trade on a global scale because we don't we substantially move more cargo today than we did back then? We were moving maybe about 2 to 3 billion tons of cargo a year. Back in the 1960s and 70s, we moved 12 billion today. So, I mean, we're just so interconnected, and the volume and velocity in which we move traffic is such that when you create these disruptions, it resonates throughout the entire supply web.

[Andrew Egger]

Yeah, I mean, it really is amazing. And this is one of those thoughts that you almost only ever have cause to think, unless it's your whole job. Like, it's kind of your whole job to think about these things. The frictionless functioning of global trade and just all of the stuff that is constantly hurtling around at all times and just sort of the. The efficiency and the economic benefits that that generates that you just don't even notice until all of a sudden. I mean, it's like. It's like the circulation of your blood. It's not until you have the. The, you know, coronary episode that you really come to appreciate how important that was. Yeah, I mean, it's really remarkable. One other thing, I mean, I just not to dwell on the President. I mean, it is kind of his thing. This is kind of why this is all happening. But he said something in the Oval Office yesterday that really struck me, which is that he said, yeah, you know, I know there's been from this. We had to do it. We had to do it. And, you know, they had foreign policy aims, they wanted to pursue, whatever. But he said, you know, and actually, I kind of thought the economic situation was going to be worse. I've been kind of pleasantly surprised by, you know, the amount of damage that we've seen. And I'm just listening to you talk about what's coming next. And I am. I'm like, my eyes are getting wider and wider, and I'm starting to freak out a little more and a little more. But. But I guess that that might be a fine place to leave it for now. A dark place to leave it for now, but a fine place to leave it for now. Obviously, we are going to continue to follow this story. Everybody else will as well, whether they want to or not, because it's coming for everybody. You actually do get a lot out of global trade when it works. Right. And right now it's not working very well for all of these reasons. Sal, thanks for coming on. Tell the people where they can find you.

[Sal Mercogliano]

Yeah, you can find me at YouTube. I run my channel. What's Going on with Shipping, where we talk about this all the time. I'm on Twitter ercogliano s and Bluesky. So if you want to follow me, you can follow me over there and I'll leave you with this. Andrew, I just want to say that, listen, global shipping has been challenged in the past. We've seen huge events happen. But it's pretty resolute. And I think the, I think the human beings are very resolute. I think we will overcome this. I think the Trump administration underestimated the situation and I think that's what is caught them right now. And I think right now we're scrambling to kind of fix it and it's going to take a concentrated effort to do it. But you know, I, I tend to be optimistic, not pessimistic, but I apologize if I came across like that. But it's serious and I think it's important that everybody knows that.

[Andrew Egger]

That's a better note to end on. I'm so glad you came in with that because I hate just driving off into the dark that way. So I appreciate it. Sal Mercagliano, thank you very much for coming on and talking through some of this stuff with us. And thanks to everybody out there who has been following along. Thanks for listening. Whether you're on YouTube, whether you're on our sub stack, we hope you'll head over to the bulwark.com check out more of our stuff. Check out Sal's podcast as well. Just such fascinating stuff. We'll see you all next time.

[Bleacher Report Announcer]

The Bleacher Report app is your destination for sports right now. The NBA is heating up, March Madness is here and MLB is almost back. Every day there's a new headline, a new highlight, a new moment you've got to see for yourself. That's why I stay locked in with the Bleacher Report app. For me, it's about staying connected to my sports. I can follow the teams I care about, get real time scores, breaking news and highlights all in one one place. Download the Bleacher Report app today so you never miss a moment.

[Ryan Seacrest]

It is Ryan Seacrest here. There was a recent social media trend which consisted of flying on a plane with no music, no movies, no entertainment. But a better trend would be going to chumbacasino.com it's like having a mini social casino in your pocket. Chumba casino has over 100 online casino style games all absolutely free. It's the most fun you can have online and on a plane. So grab your free welcome bonus [e-mail] sponsored by Chumba Casino.

[Andrew Egger]

No purchase necessary VGW group void where prohibited by law 21 terms and conditions apply.

[ZipRecruiter Advertiser 1]

Finding great candidates to hire can be like, well, trying to find a needle in a haystack. Sure, you can post your job to some job board, but then all you can do is hope the right person comes along. Which is why you should try ZipRecruiter for free at ZipRecruiter.com Zip ZipRecruiter doesn't depend on candidates finding you, it finds them for you. Its powerful technology identifies people with the right experience and actively invites them to apply to your job. You get qualified candidates fast. So while other companies might deliver a lot of hay, ZipRecruiter finds you what you're looking for. The needle in the Haystack.

[ZipRecruiter Advertiser 2]

See why 4 out of 5 employers who post a job on ZipRecruiter get a quality candidate within the first day. ZipRecruiter the smartest way to hire and right now you can try ZipRecruiter for free. That's right, free at ZipRecruiter.com Zip that ZipRecruiter.com Zip ZipRecruiter.com Zip.