Charles Sizemore gave his thoughts on the unfolding crisis in the Straits of Hormuz to the Wall Street Journal’s Quentin Fottrell:

The “Iran issue” is one of about four macro risks that concerns me in 2012, the other three being a disorderly default by Greece or another Eurozone country, a greater than expected slowing in China and the final coming of the long-awaited Japanese debt and currency crisis.  Of all of these risks, I consider Iran to be the least scary.

Iran is holding the potential closure of the Straits of Hormuz over the heads Western consumer countries and Gulf producer countries like the proverbial sword of Damocles. Closure of the Straits would send the price of crude sharply higher at a time when the West can hardly afford it. Prices are probably  already high enough to push a few countries over the edge into recession.

These effects should be relatively short-term, however. A blockade is an act of war, and the Straits would be opened by force within a matter of weeks. Rather than risk this, Iran is choosing a less lethal way to raise the stakes by threatening to cut off exports to Europe preemptively before the European oil sanctions go into effect.

Bottom line: If the Iran situation escalates into actual violence, expect a deep short-term correction in the stock market and sharply higher prices at the pump.  But if this happens, use it as a buying opportunity because the effects should not last for long.