Uncertainty

The Strait of Hormuz has become the central pressure point in the escalating confrontation between the United States and Iran. Before the conflict, roughly 20 million barrels of oil moved through the narrow waterway each day, equivalent to about one fifth of global oil consumption. For years, traders could therefore rely on relatively consistent estimates of the volumes passing through one of the world’s most important energy corridors.

That certainty has now disappeared.

The use of “dark crossings,” in which tankers switch off their identification and navigation systems, has made vessel movements increasingly difficult to monitor. Satellite imagery, port records, tanker drafts, loading schedules and shipping data are being used to reconstruct movements, but the information remains incomplete. Recent estimates of Hormuz flows have differed dramatically, leaving traders and governments uncertain about the true scale of oil moving through the waterway.

The uncertainty comes as Brent crude has moved above the $100 a barrel threshold for the first time since July, driven by renewed military escalation and concerns over Middle Eastern oil supplies.

The Hormuz Information Gap

The most unusual feature of the current oil crisis is not simply that supplies may have fallen. It is that markets cannot confidently determine how much oil is actually moving.

U.S. Energy Secretary Chris Wright said more than 17 million barrels crossed the strait on August 31 under U.S. Navy supervision. Shipping intelligence firm Kpler, however, estimated that only around 6 million barrels crossed that day. Kpler put average August flows at approximately 4.3 million barrels per day, with flows rising to nearly 5 million barrels per day during the first days of September.

The difference could partly reflect different methodologies, including whether shipments using alternative routes outside Hormuz are included. Tankers that remain invisible to tracking systems for days or even weeks make the picture even harder to reconstruct.

This means that traders are attempting to price global oil supplies without reliable visibility over one of the world’s most important supply arteries.

Why the Strait of Hormuz Matters

Hormuz is strategically important because of the enormous concentration of energy exports that normally pass through it. Any sustained disruption can affect crude supplies, tanker availability, insurance costs and shipping times, eventually feeding into fuel prices and broader inflation.

The current situation is different from a straightforward blockade. The strait has not necessarily become completely impassable. Instead, its reliability has been severely compromised.

That distinction matters because a tanker does not have to be physically prevented from crossing for markets to react. The possibility that vessels may be delayed, attacked or unable to cross safely is enough to increase the cost of transporting oil.

As a result, the market is responding not only to actual supply losses but also to the risk of future disruption.

Iran’s Strategic Leverage

Iran’s ability to disrupt maritime traffic remains an important source of leverage despite indications that its military capabilities around Hormuz have been weakened.

U.S. demining operations and a growing U.S.-protected shipping corridor along Oman’s coast have allowed more vessels to enter and leave the Gulf. At the same time, Iran-linked forces continue to threaten commercial shipping, meaning Tehran retains the ability to create uncertainty even if it cannot completely shut down the waterway.

This gives Iran a form of asymmetric leverage. Tehran does not necessarily need to close Hormuz completely to impose economic costs. Sporadic attacks, warnings or restrictions can increase insurance premiums, delay shipments and encourage traders to price in a greater possibility of supply disruption.

The renewed attacks on Saudi energy infrastructure have added another layer of risk by threatening alternative routes that have become increasingly important as traffic through Hormuz has declined.

Impact on Global Oil Markets

The immediate consequence is a higher geopolitical risk premium on crude.

Oil prices normally respond to measurable fundamentals such as production, consumption, inventories and transportation. But when the market cannot establish how much oil is moving through Hormuz, uncertainty itself becomes part of the fundamental picture.

This can keep prices elevated even if actual physical supply losses are smaller than feared.

Brent has already moved above $100 a barrel, while analysts and major financial institutions have raised their oil price forecasts as concerns about prolonged disruption increase.

For oil-importing countries, sustained high crude prices could translate into higher fuel and transportation costs, increased inflationary pressure and greater economic uncertainty. Airlines, manufacturers and businesses dependent on energy-intensive supply chains would also face higher operating costs.

Economic and Geopolitical Implications

The crisis demonstrates how vulnerable the global energy system remains to a single strategic chokepoint.

For the United States, maintaining freedom of navigation through Hormuz is not simply a military objective. It is also essential to preventing a regional conflict from becoming a wider global energy crisis.

For Gulf producers, the challenge is equally significant. Even countries with substantial production capacity cannot fully compensate for disrupted shipping if export routes remain vulnerable.

For major Asian importers, the risks are particularly serious because much of the energy normally passing through Hormuz is destined for Asian markets. A prolonged disruption could therefore create significant pressure on import bills, currencies and inflation across energy-dependent economies.

The crisis also highlights the limits of alternative routes. Pipelines and routes outside Hormuz can reduce some of the pressure, but they cannot immediately replace the enormous volumes that normally pass through the waterway.

What’s Next?

The key variable is whether the confrontation between Washington and Tehran moves toward negotiations or further escalation.

A diplomatic breakthrough could rapidly reduce the geopolitical risk premium by restoring confidence in shipping and improving visibility over oil flows. A further escalation, however, could produce additional attacks on tankers, restrictions around the Gulf or renewed pressure on alternative shipping routes.

The oil market will therefore be watching tanker movements as closely as military developments.

If shipping activity becomes more visible and flows recover, some of the current premium could disappear. If the information blackout continues, traders may continue pricing the possibility of a much larger supply disruption.

Analysis

The deeper significance of the Hormuz crisis is that information itself has become a strategic commodity.

Modern energy markets have traditionally depended on the ability to monitor ships, cargoes and supply chains with increasing precision. Satellite imagery, tracking systems and port data created an assumption that physical oil flows could be observed and measured with reasonable accuracy.

That assumption is now being challenged.

The result is a market where perception can influence prices almost as powerfully as physical shortages. If traders believe Hormuz is becoming less reliable, they will pay more for crude today even without definitive evidence of a catastrophic supply loss.

This gives Iran an important form of strategic leverage. The threat of disruption can generate economic consequences even when actual disruption remains limited.

At the same time, Washington faces a difficult calculation. Greater military protection may help keep shipping moving, but prolonged confrontation can also increase the geopolitical risk premium that the United States is trying to contain.

The central question, therefore, is no longer simply how much oil is passing through the Strait of Hormuz. It is how long the global market can function without knowing the answer.

If that uncertainty persists, the oil market could continue carrying a substantial security premium even if physical supplies prove higher than current estimates suggest. The longer the uncertainty lasts, the more deeply it can become embedded in prices, inflation expectations and global economic planning.

With information from Reuters.

Upon arrival at the FIFA U-20 Women’s World Cup, Infantino remained tightlipped on his re-election as FIFA president.

FIFA president Gianni Infantino is staying mum on the leadership challenge he faces as a result of his failed plan to sell rights to private investors in the World Cup, and he declined to answer questions about his re-election upon arrival at the Under-20 Women’s World Cup in Poland.

Infantino, who faces continuing pressure and the prospect of a criminal case, was in the stands speaking with Polish football federation president Cezary Kulesza as hosts Poland faced Argentina on the opening day of the tournament on Saturday.

However, when he arrived at the Arena Katowice, the 56-year-old avoided questions about his future at the global governing body for football.

“There will be a lot to say, but there will be a right place and a right time to say this. It’s not today, it’s not here, but here and today, we are enjoying football,” Infantino told British broadcaster Sky News outside the venue.

“We are continuing at FIFA, of course, to work to give every corner of the world a chance, an opportunity, a dignity, to find ways and means for them to become better and to participate and to celebrate football, which we all love.”

Infantino did not answer when asked if he had considered resigning or whether he still intends to stand for a fourth term next year.

Infantino had mostly kept out of the spotlight in the weeks since his World Cup sell-off plan fell apart amid opposition from many FIFA member nations and some of his own officials.

The European nations — a quarter of the 24-team field — backed down on a boycott threat last week, citing assurances from FIFA that the plan would not be revived.

Legal action over the original attempt continues, and Europe has a leading role in efforts to oust Infantino ahead of next year’s FIFA election.

A court filing by FIFA on Thursday accused UEFA of running a “smear campaign against FIFA and its leadership” as the European football body seeks discovery of evidence related to the FIFA Forward Enterprise plan.

Infantino infuriated football leaders worldwide in July, shortly after the World Cup ended, when his plan for a $20bn subsidiary controlling FIFA commercial rights, including the World Cup, was revealed by British daily The Times.

The spinoff was to be 20 percent owned by investors led by a New York fund created by Joshua Kushner, whose initial money was to pay offers of $20m to each of FIFA’s 211 member federations. They were given a mid-September deadline to accept.

The FIFA president dropped his proposal within four days. UEFA had support from the Asian Football Confederation and North American football body CONCACAF, and there was criticism of the plan and of Infantino from senior FIFA officials.

SAN DIEGO — José E. Feliciano, the new controlling owner of the San Diego Padres, lives in Los Angeles. You know, that place at the end of the Padres’ incessant “Beat L.A.” chants.

No worries, Padres fans. Feliciano is — make that was — a longtime New York Yankees fan.

“The good thing is,” he told me after an introductory news conference Monday, “rooting against the Dodgers comes naturally to me.”

It was only 18 months ago that Padres fans wondered whether the good times might come to an end, with the widow of beloved owner Peter Seidler suing his brothers for control of the team. For their part, the brothers said they had “no plans to sell the Padres.”

That sounds a lot like what Dodgers president Stan Kasten said Friday, amid a federal investigation into alleged financial improprieties among insurance companies controlled by Dodgers owner Mark Walter.

“The Dodgers are not being sold,” Kasten said. “They’re not going to be sold.”

What is true today might not be true tomorrow. What is true today, as potential bidders for the Dodgers lurk and coalesce amid L.A.’s turn at uncertainty, is that the Padres have an energetic and effervescent couple as their new principal owners.

Feliciano, a founder of Clearlake Capital in Santa Monica, took the mound at Petco Park on Monday afternoon, working out of a stretch and looking toward an invisible runner at second base before delivering a pitch. In spring training, he said, he stepped into the batting cage to try to hit simulated pitches from Padres All-Star closer Mason Miller.

His wife Kwanza Jones, an artist and entrepreneur, led her husband into the news conference amid the sounds of a song she co-wrote, she said, inspired in part by a catch made by Padres outfielder Fernando Tatis Jr.

“My only musical talent is my name,” Feliciano said. “I humbly ask you to please add my middle initial so I never get confused with the singer.”

As the couple looks for a home in San Diego, Jones appealed to fans to share what they love about their neighborhoods. Later, the couple took selfies along the first-base line.

New San Diego owners Kwanza Jones, center, and José E. Feliciano, right, speak at a news conference with Padres Chief Executive Erik Greupner at Petco Park on Monday.

(Greg Beacham / Associated Press)

Their enthusiasm bubbled forth as the news conference proceeded, as their sense of whether the Padres might finally win a World Series got more and more optimistic.

Feliciano, three minutes into the news conference: “We cannot promise we are going to win.”

Jones, two minutes later, riffing off her lyrics, her voice rising: “We gonna win! We gonna win! We gonna win — win it all!” And then a pause, to lower her voice: “We hope it’s sooner rather than later.”

Feliciano, two minutes later: “We need to win a World Series. It’s that simple. That’s what we’re going to do.”

Jones, one minute later: “Multiples.”

Feliciano, one minute later: “The impossible becomes possible when somebody does it. So let’s do it.”

This is not Feliciano’s first foray into professional sports. Clearlake Capital is the majority owner of Chelsea, the storied soccer club.

“I’m missing the first game of the Premier League right now,” Feliciano said.

He said he could not comment on reports Walter is looking to sell his stake in Chelsea. Two weeks ago, Walter announced an agreement to sell controlling interest in the Lakers at a $12.5-billion valuation, the cash from which could help repay loans under scrutiny. The Dodgers could command a similar valuation, industry sources not authorized to discuss the issue publicly told The Times, should Walter decide to sell.

As part of a search for cash, Puck reported last week, Walter had talked with Charter Communications about whether the company would be interested in paying a lump sum now to get out of its SportsNet LA contract — a money-losing deal for Charter, but the primary source of the Dodgers’ financial advantage over the other 29 teams in the major leagues.

The talks “went nowhere,” Puck reported. Kasten declined to address the matter, as did a Charter spokesman.

In 2011, with the Dodgers headed toward bankruptcy, former owner Frank McCourt found what he believed would be his financial lifeline in a television rights deal with Fox Sports.

In a withering letter to McCourt, then-commissioner Bud Selig rejected the deal, criticizing McCourt for proposing a financial structure that would have foreclosed the Dodgers from pursuing more lucrative options “because of your desperate need for immediate cash.”

That precedent could inform how Rob Manfred, the current commissioner, would evaluate any proposed restructuring of the Dodgers’ television deal. Under the owners’ current collective bargaining proposal, to which Walter agreed, the Dodgers’ annual television riches — more than $500 million per year by the end of the deal in 2038 — would be fully contributed toward revenue sharing among all 30 teams.

I asked Feliciano whether the Dodgers’ uncertainty might make this a particularly opportune time to buy the Padres.

“You’ve got to look at these things on a generational, multi-decade basis, honestly,” he told me. “It’s like trying to time a great investment in the market. You can’t.

“What I can tell you is that this is the good time — the best time — for us. I think it also coincides with Peter’s legacy: The team is in a great place, the city is in a great place.”

The Dodgers’ revenue advantage remains significant, not just because of their SportsNet LA deal but because they fill the largest stadium in the majors almost every night and employ Shohei Ohtani.

In San Diego, however, where ticket sales represent the largest source of team revenue, the Padres sell more tickets than any major league team besides the Dodgers. Petco Park already is a year-round concert venue and event center, and the Padres could rekindle plans to develop a large parking lot near the ballpark.

And, if owners emerge from collective bargaining with a salary cap or other restraint on the Dodgers’ spending, that would be a win for San Diego.

On the field, the Padres entered play Monday with 21 victories in their past 28 games. The Padres acquired Robbie Ray and Casey Mize at the trade deadline to bolster a patchwork rotation, and they retained Miller and Adrian Morejon rather than break up a mighty bullpen. Tatis leads the National League with 12 home runs since the All-Star break; outfielder Jackson Merrill has 11.

“As we have seen the last few weeks, we are very competitive. I feel we are one of those teams — us and the Phillies, probably — that nobody wants to play,” Feliciano said.

“We want to keep it that way.”

The Phillies entered play Monday on a nine-game winning streak, in position for one of the National League wild cards. The Padres also are in position for an NL wild card, keeping alive the possibility that the Dodgers and Padres could meet in the NL Championship Series.

If that happens, it won’t matter how many games the Dodgers finished ahead of the Padres during the regular season.

“We’d just need to win four,” Feliciano said.

Beat L.A., indeed.