THE CLOSING OF THE STRAITS OF HORMUZ AND WHAT MAY COME NEXT
Seemorerocks
As I write this, subsequent to yesterday's attack by the US the Iranian parliament has voted to close the Straits of Hormuz and already acted.
Despite that, several hours after I learned this Radio NZ, despite having live updates has still not reported this but posted the following vacuous piece.
https://www.rnz.co.nz/news/business/564852/what-us-attacks-on-iran-mean-for-kiwisaver-petrol-prices
This is disinformation and continues to keep New Zealanders in the dark when they face something coming down the tubes that is going to affect every New Zealander in the most horrible way.
I have written about this several times in the last few months but still have the feeling that nobody has quite got the message.
These articles were written as a warning - as a hypothetical scenario - but today this has become real unless, by some miracle , cooler heads prevail.
In actual fact, this scenario has been something that I have been aware of for 12 -13 years.
MIKE RUPPERT
About 13 years ago, after the 2008 financial meltdown , on a wet day I was surfing the web and came across someone called Michael Ruppert who in a video said something like “its not just about a ponzi scheme - the whole economy is a ponzi scheme”.
It was like the penny dropped and completely changed the way I saw the world. So began a 4 year association with Mike Ruppert until he died tragically at the beginning of 2014. Basically, I learned most of what I know now and can impart to you.
I highly recommend that you watch his 2009 movie Collapse.
You Tube versions come and go so you can watch it without censorship HERE.
What Mike Ruppert did so brilliantly was to explain just how reliant every aspect of our lives from transport to agriculture and manufacturing, and even plastics is dependant on oil. One line that sticks in my mind is that every car tyre (even electric cars) has $7 OF OIL in it. It makes total nonsense of the whole Net Zero fantasy.
The fact is we’ve built a complex, high-energy economy that can’t simply revert to pre-industrial energy sources without catastrophic disruption.
I brought up Mike Ruppert with Grok in discussing the issue and this is what it said.
Michael Ruppert’s Collapse warnings about oil’s essential role and systemic fragility are strikingly relevant to New Zealand in 2025. A prolonged oil shock would cripple JIT supermarket supply chains, spike food prices, and trigger stagflation worse than the 1970s, with 18% interest rates and carless days as potential déjà vu. New Zealand’s vulnerabilities—lost refining capacity, JIT reliance, 93% road freight, high debt—make it more exposed than in 1979, amplifying Ruppert’s fears. Whale oil or other pre-industrial fixes are impossible, as he argued, due to modern systems’ complexity. To heed Ruppert, New Zealand must bolster fuel reserves, diversify freight, localize food, and build social resilience to avoid a collapse deeper than the 1970s
That’s basically what many of us in Transition Towns and the Peak Oil movement have been banging on again for so long to absolutely no avail.
This continues (obviously) to this day.
This is a brief summary of the movie:
Oil as the Master Resource: Oil underpins every facet of the economy—transport, food production, manufacturing, and energy. Without it, modern systems grind to a halt.
Peak Oil Vulnerability: Global oil production would inevitably decline, and societies unprepared for this would face economic collapse, supply chain breakdowns, and social chaos.
No Easy Substitutes: Renewables, biofuels, or historical energy sources (like whale oil) can’t match oil’s energy density, scalability, or versatility in time to replace it seamlessly.
Systemic Fragility: Just-in-time systems, optimized for efficiency, lack resilience to oil disruptions, risking rapid societal breakdown.
Ruppert’s view that oil is the “essential input” holds true for New Zealand, where oil powers:
Transport: 93% of freight moves by road, relying on diesel. JIT supermarket supply chains depend on daily deliveries from centralized hubs to stores, with only 1–3 days of perishable stock. A fuel shortage would halt trucks, emptying shelves, as seen in localized disruptions like the 2011 Christchurch earthquake.
Agriculture: New Zealand’s export-driven economy (dairy, meat, horticulture) uses oil for machinery, fertilizers, and transport. Ruppert noted that modern agriculture is “oil-intensive”; for example, producing 1 calorie of food can require 10 calories of fossil fuel energy.
Manufacturing and Imports: From plastics to machinery, oil is embedded in goods production and global shipping. New Zealand’s reliance on imported refined fuels (148,000 barrels/day consumption vs. 55,000 barrels/day domestic production at peak) mirrors Ruppert’s warning of import-dependent economies’ fragility.
Tourism: The $9 billion industry relies on affordable fuel for flights and domestic travel, a sector Ruppert would flag as vulnerable to oil price spikes.
A prolonged oil shock—whether from geopolitical conflict (e.g., a Strait of Hormuz closure) or a 2022-style supply cut (3–4 million barrels/day)—would ripple through these sectors, validating Ruppert’s claim that “no part of our economy functions without oil.”
THE 1970s
Oil prices quadrupled in the 1973, in the first oil shock; over the decade, between 1970 and 1980 oil prices went in real terms from $3 per barrel to $40 - an increase of 10 times - an increase of of over 10x in nominal terms.!I remember the carless days that were introduced in 1979 as well as interest rates of 18 percent.
Somehow, the world economy survived that although, looking backwards, the rot set in back then.
THE JUST-IN-TIME (JIT) SUPPLY SYSTEM
But the economies of the world have changed radically since then. The most radical change was the move to Just-in-Time (JIT) supply. Stuff stopped being moved round by rail and from warehouses to a JIT system.
Basically what this meant was that supplies for supermarkets was moved by truck and very little was stored in supermarkets. That means that if for some reasons the trucks stop running supermarkets will run out of stock (within 3 days, I’m told).
The system has nothing like the resilience it had in the 1970’s.
Referring to New Zealand, Grok has this to say:
Impact on Just-in-Time (JIT) Supermarkets
A modern oil shock, per Ruppert’s warnings, would devastate New Zealand’s JIT supply chains:
Empty Shelves: Fuel shortages would halt deliveries within days, as supermarkets hold minimal stock. In 1979, larger inventories softened disruptions; today’s JIT model has no buffer.
Price Surges: Diesel cost spikes would inflate food prices, especially for imported goods. The 1970s saw double-digit food inflation; today’s concentrated supply chains could see worse.
Panic Buying: Social media could trigger hoarding, as Ruppert predicted for resource crises, clearing shelves faster than in 1979’s carless days.
Inequity: Rural areas, far from distribution hubs, would face worse shortages, amplifying social tensions Ruppert foresaw.
Also from Grok.
Oil’s Essential Role in New Zealand’s Economy
Ruppert’s view that oil is the “essential input” holds true for New Zealand, where oil powers:
Transport: 93% of freight moves by road, relying on diesel. JIT supermarket supply chains depend on daily deliveries from centralized hubs to stores, with only 1–3 days of perishable stock. A fuel shortage would halt trucks, emptying shelves, as seen in localized disruptions like the 2011 Christchurch earthquake.
Agriculture: New Zealand’s export-driven economy (dairy, meat, horticulture) uses oil for machinery, fertilizers, and transport. Ruppert noted that modern agriculture is “oil-intensive”; for example, producing 1 calorie of food can require 10 calories of fossil fuel energy.
Manufacturing and Imports: From plastics to machinery, oil is embedded in goods production and global shipping. New Zealand’s reliance on imported refined fuels (148,000 barrels/day consumption vs. 55,000 barrels/day domestic production at peak) mirrors Ruppert’s warning of import-dependent economies’ fragility.
Tourism: The $9 billion industry relies on affordable fuel for flights and domestic travel, a sector Ruppert would flag as vulnerable to oil price spikes.
Increased Vulnerability Since the 1970s
Loss of Marsden Point Refinery:
In the 1970s, Marsden Point processed domestic and imported crude, covering ~20–30% of fuel needs during the 1979 oil shock. Carless days helped, despite low compliance (50–60%). Today, its 2022 closure means 100% reliance on imported refined fuels, aligning with Ruppert’s warning about import-dependent systems collapsing when global supply chains falter. New Zealand’s 90-day fuel reserves (IEA minimum) could deplete rapidly, and force majeure clauses in emergency contracts may leave the country outbid in a crisis.
Just-In Time-Supply Chain Fragility:
Ruppert criticized Just-In Time systems for prioritizing efficiency over resilience, a point that hits home for New Zealand’s supermarkets. Unlike the 1970s, when stores held weeks’ worth of stock, today’s 1–3-day perishable inventory means fuel disruptions would cause shortages within days. Two chains (Foodstuffs, Countdown) control 80–90% of retail, and regional production concentration (e.g., 32% of horticulture from Bay of Plenty/Hawkes Bay) amplifies risks compared to the more distributed 1970s systems.
Higher Debt and Economic Complexity:
The 1970s saw 18% interest rates (as you recalled) to fight 15–20% inflation, but lower debt levels cushioned the blow. Today, public debt (50% of GDP) and household debt (90% of GDP) make similar rates catastrophic, risking defaults and recession. Ruppert warned that debt-fueled economies are brittle, and New Zealand’s exposure to global trade (exports like dairy) and tourism makes it more susceptible to stagflation than in 1979.
Global Supply Chain Risks:
Ruppert highlighted globalized economies’ vulnerability to oil shocks. In the 1970s, New Zealand’s trade was less interconnected; today, fuel imports rely on volatile shipping routes. A disruption (e.g., 2022’s Russian shock) could spike prices or cut supply, hitting supermarkets and exporters harder than in 1979.
Social Fragility:
Ruppert foresaw social unrest from resource scarcity. Unlike the 1970s, when New Zealanders were more accustomed to austerity, modern society is less resilient. Social media could amplify panic buying, as during COVID-19, emptying JIT supermarkets faster than during the 1979 carless days.
CONCLUSION
These are just a few points of what is likely to eventuate for local economies (not just New Zealand when what is coming down the line (bar some miracle) in a few short weeks or months.
May I call it what it is:
Being caught downstream without a paddle
The people are being wilfully kept in the dark and things will change radically for people and they will be caught without warnng.
Even without the eventuality of a possible nuclear war I have little expectation, with my state of poor health and therefore lack of resilience, of coming through this alive.
In the meantime I will add my voice in the wilderness to warn people what’s coming even though I suspect that if people haven’t been actively making preparations it’s already too late.
For the masses it’s already too late and I fear the panic that may overtake them when reality shows itself.
Great journalism Mr. Westenra. We can deal with the consequences of this planned insanity if we realize that our physical death is not the end, but merely a transition.
Bravo, Iran!! Finally, the Shiites are beginning to act like men rather than pussies. Now, start bombing Israel heavily with bombs which misdirect their Iron Dome and Arrow systems. You've evidently tested them. You can get them to fire at each other. Once you have a big showy brouhaha, let everything calm down and the citizens begin sleeping, then fire your heavy missiles which do significant damage. Your goal is to keep all citizens awake for a minimum of 24 hours with hellfire raining on them. Take out everything military. Take out water systems; food distribution points; energy centers. War is hell. Make it so.