Strait of Hormuz is in focus as Israel-Hamas war threatens to spread
Tankers depicted in the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates.
ATTA KENARE | AFP | Getty Images
It’s been nearly four weeks since Israel declared war on Palestinian militant group Hamas, and as the conflict in Gaza enters the second stage, concerns of a spillover into the wider Middle East region is also mounting.
Market observers are keeping a close eye on the the Strait of Hormuz — the world’s most important oil transit chokepoint, to see if there may be any potential impact.
The strait, which sits between Oman and Iran, is a vital channel where about one fifth of global oil production flow daily, according to the Energy Information Administration. It is a strategically important waterway linking crude producers in the Middle East with key markets across the world.
On Oct. 7, Hamas militants launched a multi-pronged attack by land, sea and air and infiltrated Israel, killing more than 1,400 people. In retaliation, Israel launched air strikes and a ground invasion into the Gaza Strip, which has so far killed more than 9,000 people in the enclave.
Risks of it spiraling into a wider conflict remain. The U.S. has deployed military assets to the region to support Israel which is fending off rocket volleys from Iran-backed militants in neighboring Lebanon and Syria.
The U.S. has also carried out airstrikes against targets linked to Iran’s Revolutionary Guard Corps in Syria.
A retaliation from Israel against Iran risks a closure of the strait, pushing oil prices to above $250 a barrel, a recent Bank of America note predicted. Iran is a major oil producer, and its proxies include Hamas and the Hezbollah, militant organizations that are respectively based in Gaza and Lebanon and have stated aims to destroy Israel.
Observers worry that Israel’s intense bombardment of the Gaza Strip will incite more of its adversaries to attack from new fronts, risking a spill over into the wider Middle East region.
However, some industry watchers say that a closure is unlikely.
“The probability of a supply disruption, especially the shutdown of the Strait of Hormuz, is of a low probability,” said Andy Lipow, president of Lipow Oil Associates. He said oil producers like Saudi Arabia, Iran, Iraq and Kuwait are still reliant on the revenue that comes with access to the strait.
Goldman Sachs echoed the same sentiment.
Analysts led by head of oil research Daan Struyven said in an Oct. 26 note that a “severe supply downside scenario” as a result of an interruption of trade through the Strait of Hormuz is not likely to materialize.
On Sunday, Iranian President Ebrahim Raisi said on social media platform X, formerly known as Twitter, that Israel had “crossed the red lines, which may force everyone to take action.”
Foreign ministers of Arab nations — including the United Arab Emirates, Jordan, Bahrain, Qatar, Kuwait, Saudi Arabia, Oman, Egypt and Morocco — condemned the targeting of civilians and violations of international law in Gaza by Israeli forces. Israel says it does not target civilians, only terrorist targets.
In 2019, Iran repeatedly threatened to disrupt oil shipments going through the Strait of Hormuz after former U.S. President Donald Trump withdrew from the landmark 2015 nuclear deal and restore sanctions on the Islamic country. In the past two years alone, Iran has attacked or interfered with 15 internationally flagged merchant vessels, according to data from the U.S. Navy.
On Monday, the World Bank projected that oil prices could surge to $157 per barrel should the ongoing conflict continues to escalate.
The World Bank warned of a repeat of the Arab oil embargo in 1973, where Arab energy ministers imposed an embargo on oil exports on the U.S. in retaliation for its support of Israel in the 1973 Arab-Israeli war.
In such a scenario, there could be a “large disruption” scenario, “that would drive prices up by 56% to 75% initially — to between $140 and $157 a barrel,” the report said.
Lipow said it’s not likely for such a scenario to take place.
Oil prices year-to-date
“Times are quite different today than they were 50 years ago, because you have these Mideast countries that simply need the [oil] revenue,” he said.
That said, Lipow pointed out that Iran has been “prosecuting the war through its proxies.”
“One of my fears is that maybe one of these proxies makes a very bad mistake when they’re attacking Israel,” he added. Should that happen, the analyst said Israel will likely retaliate, going “right for Iran’s jugular” which would deteriorate very quickly into a regional conflict.
GreenPower Motor Company says it’s received three orders for 11 of its BEAST electric Type D school buses for western state school districts in Arizona, California, and Oregon.
GreenPower hasn’t made the sort of headline-grabbing promises or big-money commitments that companies like Nikola and Lion Electric have, but while those companies are floundering GPM seems to be plugging away, taking orders where it can and actually delivering buses to schools. Late last year, the company scored 11 more orders for its flagship BEAST electric school bus.
As far as these latest orders go, the breakdown is:
- seven to Los Banos Unified School District in Los Banos, California
- two for the Hood River County School District in Hood River, Oregon
- two for the Casa Grande Elementary School District in Casa Grande, Arizona
Those two BEAST electric school buses for Arizona will join another 90-passenger BEAST that was delivered to Phoenix Elementary School District #1, which operates 15 schools in the center of Phoenix, late last year.
“As school districts continue to make the change from NOx emitting diesel school buses to a cleaner, healthier means of transporting students, school district transportation departments are pursuing the gold standard of the industry – the GreenPower all-electric, purpose-built (BEAST) school buses,” said Paul Start, GreenPower’s Vice President of Sales, School Bus Group. “(The) GreenPower school bus order pipeline and production schedule are both at record levels with sales projections for (2025) set to eclipse the 2024 calendar year.”
GreenPower moved into an 80,000-square-foot production facility in South Charleston, West Virigina in August 2022, and delivered its first buses to that state the following year.
Electrek’s Take
Since the first horseless carriage companies started operating 100 years ago (give or take), at least 1,900 different companies have been formed in the US, producing over 3,000 brands of American automobiles. By the mid 1980s, that had distilled down to “the big 3.”
All of which is to say: don’t let the recent round of bankruptcies fool you – startups in the car and truck industry is business as usual, but some of these companies will stick around. If you’re wondering which ones, look to the ones that are making units, not promises.
SOURCE | IMAGES: GreenPower Motors.
FTC: We use income earning auto affiliate links. More.
While some recent high-profile bankruptcies have cast doubt on the EV startup space recently, medium-duty electric truck maker Harbinger got a shot of credibility this week with a massive $100 million Series B funding round co-led by Capricorn’s Technology Impact Fund.
It’s been a rough couple of weeks for fledgling EV brands like Lion Electric and Canoo, but box van builder Harbinger is bucking the trend, fueling its latest funding round with an order book of 4,690 vehicles that’s valued at nearly $500 million. Some of the company’s more notable customers including Bimbo Bakeries (which owns brands like Sara Lee, Thomas’, and Entenmann’s) and THOR Industries (Airstream, Jayco, Thor), which is also one of the investors in the Series B.
Other prominent investors include Tiger Global, the Coca-Cola System Sustainability Fund, and ArcTern Ventures.
As for what makes Harbinger such an attractive investment prospect, Dipender Saluja, Managing Partner of Capricorn Investment Group’s Technology Impact Fund explains that, “Harbinger has demonstrated a remarkable ability to reach significant milestones far quicker than other EV companies … the market has been impressed by their ability to develop large portions of the vehicle in-house to drive down unit costs, while remaining capital efficient.”
The company plans to use the funds to ramp up to higher-volume production capacity and deliver on existing orders, as well as build-out of the company’s sales, customer support, and service operations.
“Harbinger is entering a rapid growth phase where we are focused on scaling production of our customer-ready platform,” said John Harris, co-founder and CEO. “These funds catalyze significant revenue generation. We’ve developed a vehicle for a segment that is ripe for electrification, and there is a strong product/market fit that will help fuel our upward trajectory through 2025 and beyond.”
The company has raised $200 million since its inception in 2021.
SOURCE | IMAGES: Harbinger.
FTC: We use income earning auto affiliate links. More.
There is no state more associated with cars and car culture than Michigan – and the state that’s home to the Motor City has just taken a huge step into the future with the deployment of its first-ever all electric police vehicle.
The 2024 Ford Mustang Mach-E patrol vehicle is assigned to the Michigan State Police State Security Operations Section, and will be to be used by armed, uniformed members of the MSP specializing in general law enforcement and security services at state-owned facilities in the Lansing, MI area.
“This is an exciting opportunity for us to research, in real time, how a battery electric vehicle performs on patrol,” says Col. James F. Grady II, director of the MSP. “Our state properties security officers patrol a substantially smaller number of miles per day than our troopers and motor carrier officers, within city limits and at lower speeds, coupled with the availability of charging infrastructure in downtown Lansing, making this the ideal environment to test the capabilities of a police-package battery electric vehicle.”
The MSP’s Precision Driving Unit is nationally renowned for its annual Police Vehicle Evaluation, which our own Scooter Doll participated in last year, driving the then-new Chevy Blazer EV Police Pursuit Vehicles in a game of “cops and robbers.”
In those tests, the EVs have impressed – but the MSP has been hesitant to commit to a BEV until now. “We began testing battery electric vehicles in 2022, but up until now hybrids were the only alternative fuel vehicle in our fleet,” said Lt. Nicholas Darlington, commander of the Precision Driving Unit. “Adding this battery electric vehicle to our patrol fleet will allow us to study the vehicle’s performance long-term to determine if there is a potential for cost savings and broader applicability within our fleet.”
Michigan joins other states like Wisconsin and California in deploying electric patrol cars and saving big money on fuel and maintenance, with many more out there and many more to come.
SOURCE | IMAGES: Michigan State Police.
FTC: We use income earning auto affiliate links. More.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports10 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway