Counterterrorism Center Director Resigns Over Iran War | Balance of Power 03/17/2026
Speakers
Summary
- The closure of the Strait of Hormuz continues to disrupt global trade, with ship fuel costs more than doubling in recent weeks, directly impacting supply chains.
- U.S. diesel prices have topped $5/gallon for the first time since 2022, with jet fuel also doubling since the start of the Iran conflict, signaling a broader global energy crisis.
- Port of Los Angeles Executive Director Gene Seroka states the high fuel costs will immediately hurt truckers, who move two-thirds of the port's cargo, and could lead to container pile-ups in Asian ports if the Strait remains closed.
- Bloomberg Intelligence's Mike McGlone warns of potential "demand destruction" from high prices and draws parallels to 2008, noting the Bloomberg Commodity Index is up ~25% this year. He sees the situation as a short-term spark for higher prices that may lead to lower prices in a few months.
- McGlone highlights the fertilizer crisis, noting there is no strategic reserve, which could push hundreds of millions into food insecurity. He links this to corn prices, where the cost to produce is below $4/bushel but prices are nearing $5.
- Former Ambassador Thomas Nides characterizes Iran's regime as "dangerous" and a regional threat but avoids endorsing the "imminent threat" justification for war. He states real change in Iran must come "from the bottom up."
- Representative Jim McGovern strongly criticizes the U.S. embargo on Cuba, calling the denial of fuel a "human rights violation" that causes blackouts and hurts the Cuban people, not the government. He advocates for engagement over economic pressure.
- The resignation of the National Counterterrorism Center director, who stated Iran posed "no imminent threat," introduces political uncertainty but is currently viewed as an isolated incident within the administration.
- Seroka notes there is no clear indication of when the Strait will reopen, and even if it does, it would take "weeks and probably months" to resync the global supply chain.
Trade Ideas
McGlone stated the closure of the Strait of Hormuz is causing a "global energy crisis" and a "potential recession," with U.S. diesel topping $5/gallon and jet fuel prices doubling. The sustained blockage of a critical oil chokepoint is drastically reducing supply and spiking global fuel prices, which acts as a tax on the entire economy and can lead to demand destruction. WATCH because the situation is a clear price catalyst with recessionary implications, but the timeline for resolution is highly uncertain and prices may auto-correct if demand falls sharply. The Strait of Hormuz reopens sooner than expected, or a global economic slowdown destroys demand faster than supply is constrained.
McGlone highlighted the fertilizer crisis, noting there is "no strategic reserve," and linked it to corn, where the cost of production is below $4/bushel but prices are nearing $5. Fertilizer is a critical agricultural input. Supply disruption from the Middle East crisis threatens crop yields and production costs. High input costs can spark a short-term price spike in key grains like corn, but may also accelerate a subsequent price collapse if demand drops. WATCH because the input cost shock creates volatility and near-term upside pressure in agricultural commodities, but the thesis is contingent on the conflict's duration and eventual demand response. The fertilizer supply chain is quickly rerouted, or a major crop forecast indicates overwhelming supply (like the U.S. superabundance McGlone mentioned).
Seroka stated ship fuel costs have more than doubled, and the cost surge will be "a big hit to the truckers" who move the majority of cargo, with these costs needing to be absorbed. Transportation is the first-mile and last-mile of the supply chain. A direct, massive increase in its primary input cost (fuel) immediately pressures margins for shipping lines and trucking firms, which will eventually be passed to consumers. WATCH because the sector faces a near-term, severe margin squeeze from an exogenous shock. The duration of the shock will determine if it leads to bankruptcies or sustained higher freight rates. A swift reopening of the Strait of Hormuz leads to a rapid normalization of fuel prices.
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