There is a theory called the “resource curse” saying that discovering valuable natural resources (like oil) can cause instability and war. Particularly as rival ethnic or political groups fight for control of the resources and the wealth it brings.
Since, West – Iran relations failed to gain any sort of understanding, it is evident that U.S. and other western countries after enforcing severe sanctions and bans over the major oil exporter – Iran will also have severe affects on their own economies.
Coho Capital 2Q20 Commentary: Podcasts, The New Talk Radio
Coho Capital commentary for the second quarter ended June 30, 2020. Q2 2020 hedge fund letters, conferences and more Dear Partners, Coho Capital returned 46.6% during the first half of the year compared to a loss of 3.1% in the S&P 500. Many of our holdings, such as Netflix, Amazon, and Spotify, were perceived beneficiaries Read More
In the IEA’s monthly Oil Market Report they have said that the European and US trade sanctions designed to impede Iran’s nuclear program could affect far more than the 600,000 barrels per day (bpd) that the EU normally imports.
EconMatters wrote in one of their articles that:
The U.S. and its allies believe Iran is building nuclear weapons, which Tehran has vehemently denied. Last week, the European Union (EU) imposed a ban on Iran oil imports effective July 1, and froze the assets of its central bank. In December, the U.S. said it would “blacklist” companies in the U.S. market if they do business with Iran’s central bank.
To figure out what ‘Oil’ can cause, watch this info-graphic by Fuel Freedom that shows how oil prices affect the U.S. Economy and who’s hurt the most.