Silicon Valley's "Pronatalists" Killed WFH. The Strait of Hormuz Brought It Back

Ok, this is wrong but it's not your fault for believing it because for reasons I can't really fathom, nobody talks about it. There were several causes to the massive Covid inflation spike but the biggest factor was actually supply shock. And it was 100% Donald "Art of the Deal" Trump's fault. It requires a little explanation.

Let's wind back to March-April 2020. If you remember, there was a brief period where because of shutdowns oil prices went negative. Commodities are generally traded at spot prices and with what are called futures contracts. A future contract allows you to schedule the purchase or sale of a commodity at a price that's agreed upon today. Producers and consumers use this to de-risk prices.

Oil futures contracts are standardized with fixed delivery dates and sizes (usually 1000 barrels per contract). So in April there was a glut and nowhere to store it becasue people stopped buying on the spot market and had trouble accepting deliveries anyway. So for a brief moment, producers had to start paying people to take oil because they had nowhere to put it. Technically, this is an example of an extreme contango market.

So the world produces and uses roughly 100M barrels per day ("bpd") of oil. OPEC+ produces 40-50% of that and they like stability in the oil market. Too low and they don't make enough money. Too high and it create political instability and economic distress. The current guidance is a floor of $70 and a ceiling of $80 is considered "ideal".

So how does OPEC+ do this? They meet every 3 months and look at projected demand and adjust supply accordingly.

In May (give or take), Trump went to MBS (Mohammed bin Salman, Crown Pricne of Saudi Arabia) and asked--begged really--him to cut production because the administration believed there would be a prolonged demand slump. Now this was largely unnecessary because OPEC would do this anyway with their 3 monthly rolling cycle.

For reasons I won't get into, this was an opportunity for MBS to get back at Donald Trump for screwing over OPEC in 2018 when Trump intentionally crashed the oil market.

Starting in June 2020 and lasting 2 years, OPEC would cut production, initially by 9.7Mbpd (going down in stages to 6.3Mbpd). That's 10% of world supply. Don't believe me? It's documented [1]. And nobody talks about it.

This was, as we now know, a disaster. Demand exploded in 2021. The now-Biden administration quietly went to MBS and asked him to reverse the cuts. He refused. It was payback. The Biden administration could've absolutely talked abou this but didn't. No Democrat did. Because no establishment Democrat wants to actually upset the oil and gas industry and interfere with American foreign policy, no matter how much huffing and puffing they do about caring about such things.

So when people ask "what happens if the Strait of Hormuz closes?" we don't need to speculate. We know exactly what happens because it's already happened. Except this time it's worse. And all of these consequences were completely foreseeable and known but were ignored. And the war with Iran is 100% unwinnable.

[1]: https://www.reuters.com/article/economy/special-report-trump...

If you're looking for a cheap way to lay people off, you probably dont want to have to make large investments in real estate to do so.

I think it was mostly about lack of trust and desire to regain a feeling of control over employees. The soft layoffs were just a bonus.

When my company WFH during covid the first thing they did was force-install invasive tracking software. You could practically taste the executive paranoia.

This is the right answer. I have a child, work remotely and while I appreciate the flexibility, I kind of hate it for my career. The article is mostly vibe-y without any digging into why people with children need to commute from so far.

It's rent, the answer is almost always rent. Its my rent, its my child-care workers rent, it my kids school-teachers rent. It's always rent.

> How the hell did CEOs get away with telling us that offshore dev teams would be fine because in-person collaboration wasn't necessary while simultaneously saying we all had to be in the office?

Because of workers who let them get away with it (apparently, including yourself). Workers who do not collectively act in their own best interests get taken advantage of, that is what CEOs exist to do.