The factoid thrown around is that roughly 20% of the world’s oil supply travels through the Strait of Hormuz. Since it closed, my local gas prices in one area of the US midwest have gone from $2.60 to now $4.10 presumably as reserves have been used up.

I could understand a 20~30% increase in price to correlate with the reduction in supply, but what are the economic factors that lead to what feels like such a disproportionate increase?

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[–] 29 points 6 months ago (1 child)

If there are 300 life jackets on a sinking ship being sold for $10 each on a ship with 300 people on it. No problem.

Ohh, I think there's a problem...

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