Time to check in with Paul Krugman, who was interviewed by Greg Sargent recently. Here’s a bit of what he had to say:

Krugman: For most of us, by about a week into the war, it was obvious that basically America lost. But Trump cannot bring himself to acknowledge that.

He’s been trying—he’s threatening to bomb them back into the Stone Ages, and he’s been threatening war crimes, and he’s been imposing counter-blockades against the blockade—all of which seems to be because he cannot seem to accept that actually he screwed up badly. There is no good outcome for the United States here. All we can do is accept something that actually leaves Iran stronger than it was, but he won’t do it.

Sargent: Well, we just learned that gas prices rose on Tuesday to the highest level in four years. It’s well over $4 a gallon on average. Brent crude is over $100 a barrel again. Paul, can you just walk us through the basics of how those developments are tied to the Strait of Hormuz remaining closed?

Krugman: Yeah. Before this war, about 15 percent of the world’s oil flowed through that strait. And it’s other stuff too—natural gas, helium, fertilizer—but right now let’s focus on the oil.

So 15 percent of the world’s oil goes through that narrow passageway, which is extremely easy for Iran to block. That 15 percent—there’s really not much of an exit. There’s no real way around the Iranian blockade. A little bit of stuff can go by pipeline, but not much. And that’s a lot of oil being denied to the world market. And of course, the price of oil has gone way up.

But if this continues, he ain’t seen nothing yet. Because the really interesting thing—I cited some numbers from Goldman Sachs in the Substack—although the price of oil is way up, consumption of oil is only down a little bit. And mostly what’s happening is that they’re drawing down inventories of oil, that people who have oil in storage tanks, with oil that was already on tankers, is being used up, which is all happening out of the belief that the strait will reopen soon and prices will come down.

As people start to realize that that’s not about to happen—which has been happening just over the past couple of days—then the prices have to go much, much higher.

Go read the whole thing.