European Politics in Deep Sleep

American Thinker 

With the Hormuz crisis, another element falls into place in the mosaic of the new world order. This order is dominated by the titanic struggle between the U.S. and China, manifesting in commodity and energy markets. That Europe has slept through this transformation is a sign of blatant reality denial.

We are currently receiving conflicting reports from the Strait of Hormuz -- that strategic chokepoint where global geopolitical weather is shaped like nowhere else. Sometimes a Greek tanker passes through, sometimes a French one. Most often, tankers destined for India or China navigate without incident.

Hormuz delivers a master class in geostrategy and power politics -- something Germany, above all, has largely ignored for decades. After three decades of complacency and firm belief in Fukuyama’s thesis that globalized free markets would ultimately pacify humanity, a hangover now prevails.

Secure transport routes, pricing power in commodity and energy markets, and even insurance -- the U.S. intervention in Iran is multifaceted. It addresses the escalating resource war with China and other aspects, such as the maritime insurance industry.

Between the U.S. and the City of London -- specifically major insurers like Lloyd’s, Skuld, NorthStandard, and London P&I -- a real battle for this market segment has erupted.

At the conflict’s outset, London insurers suspended numerous war-risk policies for ships in the Strait of Hormuz. Alternative coverage was offered at premiums twelve times higher -- under such conditions, transit is no longer profitable. Tankers headed for Indian or Chinese ports are often insured outside Western systems, relying on Iranian guarantees for safe passage.

The U.S. government simultaneously announced plans for a state-backed insurance program through the U.S. International Development Finance Corporation (DFC). This pool is to start with $20 billion in volume and government guarantees, eventually moving into the hands of the private American insurance sector.

The U.S. watches Europe’s hesitant stance in securing its own energy supply from Hormuz with evident cynicism. Being nearly energy-autonomous themselves, they can afford to buy time.

Incorporating insurance into strategic calculations is a groundbreaking geopolitical move by the U.S. Treasury secretary Scott Bessent, responsible for the insurance strategy, expects the Strait to reopen in the coming weeks -- either under U.S. escort or via a collective allied solution. One certainty: energy transfer will become significantly more expensive for importers like the EU -- the free lunch for Europeans is over.

A similar dynamic is visible at NATO, where the U.S. increasingly questions why it should finance a military club that parasitically depends on American technological and financial capabilities without taking real risks itself.

President Donald Trump breaks conventions, dismantling the postwar order if it hasn’t already become history. Whoever controls national insurance and maritime chokepoints wields enormous leverage in an increasingly realistic scenario of geopolitical tension.

Viewed differently, the once-global British Empire now exists as a form of virtual power, generating influence through control over key maritime chokepoints. Financialization of the economy is central to understanding the still-real power of the City of London.

Its global financial network acts like a web around the planet. The London Exchange, along with its commodity and precious metals sectors, still wields massive influence over critical metal pricing.

Pressure is mounting on London’s precious metals markets as physical outflows accelerate. Financial institutions destabilized by massive issuance of uncollateralized instruments, coupled with gold and silver prices reflecting actual scarcity, mirror the increasingly strained relationship between Washington and London.

Pricing power in critical commodities equates to real geopolitical power. The U.S. has clearly drawn harsh lessons from the rare earths shortage.

Beijing -- as Europeans painfully know -- will impose export bans on critical resources like rare earths if under economic or political pressure. To counter this, the U.S. seeks leverage, as in Venezuela and Iran, over resource pricing.

Europe’s intense pressure amid the U.S.-China showdown is a logical consequence of a series of political errors. Morally driven energy policy carries consequences, and the romantic escapism of eco-socialists comes due.

Energy and commodity prices will not return to prior levels. They will find a new plateau, fluctuate, and the conflict will continue. Commodities are increasingly strategic bargaining tools, granting producers substantial power.

The era of globalization, which brought enormous efficiency gains over three decades, is over.

China’s Belt and Road Initiative must now be classified as mercantilist politics. Observers never believed altruism drove Beijing to build infrastructure in Africa or South America -- the approach was far smarter and forward-looking than the outdated European or British extractionist models now ending under U.S. policy.

Brussels, under German ideological leadership, has trapped itself. Its Green Deal is a moralized energy policy now functioning as a poverty engine.

Europe must intellectually mature, shed ideology, and bury eco-socialism as an anti-civilizational path of failed collectivist policies. A peace agreement with Russia is necessary to restore energy and resource imports, buying time to develop a continent-wide nuclear energy program.

In the short term, securing critical raw materials and energy must dominate the political agenda. The degrowth ideologues are on the verge of achieving their long-held dream of energy rationing -- intolerable yet inevitable, as they hold Europe’s levers of power. Voters hold the ultimate remedy.

The present is largely lost -- but if Europe regains reason, it can reemerge as a force of reason and a serious political player in the future.