Is it more serious than the oil crisis plus the Russia-Ukraine conflict? Trump blocks the Strait of Hormuz, will oil prices reach $150?
2026-04-13 15:29:49
US President Trump ordered a naval blockade of the Strait of Hormuz on Sunday (April 12), a move that further diminishes hopes for a quick end to the Middle East conflict and sharply escalates the standoff with Iran, triggering the worst energy shock in history.
A statement from the U.S. Central Command said the blockade would take effect at 10:00 a.m. Eastern Time on Monday (22:00 Beijing Time), targeting all vessels from all countries entering or leaving Iranian ports and coastal areas, including the Arabian Gulf and the Gulf of Oman. Within hours of the blockade announcement, tanker traffic through the strait came to a standstill again, with at least two vessels that were preparing to depart turning back.
Tanker traffic had picked up slightly after Trump announced a two-week ceasefire, but the situation quickly reversed after negotiations broke down.
Investors quickly priced in the risk of further tightening of supplies in the Persian Gulf, causing a sharp rise in crude oil prices. US crude oil prices jumped at the open on Monday (April 13) and are currently trading around $103.50 per barrel, up about 7.2% on the day.
Before the conflict, about one-fifth of the world's oil was transported through the Strait of Hormuz. The blockade will further exacerbate supply squeezes, affecting not only crude oil but also pushing up prices of commodities such as fertilizers and helium, which are key inputs for food production and semiconductor manufacturing, thus exacerbating already accelerating inflation.
Trita Parsi, executive vice president of the Quincy Institute, warned on CNBC that lockdowns would remove more oil from the market, potentially pushing oil prices to around $150 per barrel. Ben Emons, managing director of Fed Watch Advisors, also pointed out that fertilizer and helium prices will continue to rise, fueling inflationary pressures.
International Energy Agency (IEA) Executive Director Fatih Birol said last week that the current disruption of the Strait of Hormuz is the worst energy shock in the world's history, more severe than the oil crisis of the 1970s and the Russia-Ukraine conflict combined.
S&P Global Vice Chairman Daniel Yergin pointed out that the scale of this disruption is unprecedented, far exceeding events such as the 1970s oil crisis, the Iran-Iraq War, or the 1990 Iraqi invasion of Kuwait.
David Lubin, a senior fellow at Chatham House, believes that despite the severity of the impact, the global economy's dependence on oil has decreased, with oil consumption per unit of GDP now around 40% of what it was in the early 1970s. Wind, solar, and nuclear power have also diversified the energy mix. However, if the conflict escalates further, the energy shock could reach the severity of that of the 1970s.
IMF and World Bank officials have indicated they will lower global economic growth forecasts and raise inflation expectations, with emerging markets expected to be hit hardest. Barclays warns that the economic scars left by damage to energy facilities and ports in Iran and other Gulf states could suppress supply in emerging Asia for a long time.
Some analysts view the blockade as a pressure tactic rather than an eventual escalation. Trita Parsi points out that since neither side has explicitly stated that negotiations will not resume or the ceasefire will end, all actions should be viewed as tactics and threats within the negotiations.
Brian Jacobsen, chief economist at Annex Wealth Management, is cautiously optimistic, believing Washington may grant allied ships exemptions from safe passage. However, Ben Emons warns that this strategy, aimed at forcing Iran to submit, could easily trigger a retaliation and a new round of military escalation.
Iran's Islamic Revolutionary Guard Corps issued a strong warning last Sunday, stating that any warship approaching the Strait of Hormuz under any pretext would be considered a violation of the ceasefire, and that enemies would be drawn into a "deadly vortex." Furthermore, the blockade is controversial under international law, and the United States does not have the legal authority to close or obstruct passage through the Strait.
Trump's decision to block the Strait of Hormuz has further escalated the risk of a global energy crisis following the breakdown of US-Iran negotiations. Oil prices have surged in the short term, and supply chain disruptions could impact the fertilizer, food, and semiconductor industries. Although current market reactions have been relatively restrained, and the global economy's energy intensity has decreased, historical experience shows that prolonged disruptions will lead to severe inflationary and growth pressures. The ultimate outcome depends on whether both sides return to negotiations and whether the blockade escalates into a broader confrontation.
Q: How much actual impact will a blockade of the Strait of Hormuz have on global oil supply?
A: The Strait of Hormuz originally handled about 20% of global oil shipments. Since the outbreak of the conflict, traffic has been drastically reduced to a trickle. A blockade would further cut off shipping from Iranian ports, widening the supply gap. Analysts predict this could push oil prices up to $150 per barrel and cause further increases in the prices of commodities such as fertilizers, impacting global food production and industrial supply chains.
Q: How severe is this energy crisis compared to the oil crisis of the 1970s?
A: International Energy Agency Executive Director Fatih Birol stated that this crisis is the most severe energy shock in history, surpassing the combined impact of the two oil crises of the 1970s and the Russia-Ukraine conflict. S&P Global's Daniel Yergin also pointed out that its scale far exceeds any previous event. However, the current global economy's reduced dependence on oil and more diversified energy structure may make it slightly more resilient to the shock than in the 1970s.
Q: Is Trump's lockdown order a negotiating tactic or could it lead to a military miscalculation?
A: Some analysts believe this is a negotiating tactic to pressure Iran, as neither side has formally announced the end of the ceasefire. However, the Iranian Revolutionary Guard has warned that any warship approaching the Strait will be considered a violation of the ceasefire and could trigger a retaliation. Experts also point out that the blockade lacks a basis in international law and carries the risk of miscalculation and escalation into a wider conflict.
Q: Will oil prices remain high in the short term? What is the long-term outlook?
A: Following the announcement of the blockade, US crude oil prices surged. Prices had previously retreated during the ceasefire period, but the threat of a blockade could push prices back above $105 or even higher. Short-term volatility will continue. However, if the US and Iran return to negotiations or the situation eases, supply shortages may ease, and oil prices could fall. The IMF and World Bank have lowered their global growth forecasts and raised their inflation expectations, with emerging markets being the most affected.
At 15:29 Beijing time, US crude oil futures were trading at $103.48 per barrel.
A statement from the U.S. Central Command said the blockade would take effect at 10:00 a.m. Eastern Time on Monday (22:00 Beijing Time), targeting all vessels from all countries entering or leaving Iranian ports and coastal areas, including the Arabian Gulf and the Gulf of Oman. Within hours of the blockade announcement, tanker traffic through the strait came to a standstill again, with at least two vessels that were preparing to depart turning back.
Tanker traffic had picked up slightly after Trump announced a two-week ceasefire, but the situation quickly reversed after negotiations broke down.
Oil price surge and supply disruptions
Investors quickly priced in the risk of further tightening of supplies in the Persian Gulf, causing a sharp rise in crude oil prices. US crude oil prices jumped at the open on Monday (April 13) and are currently trading around $103.50 per barrel, up about 7.2% on the day.
Before the conflict, about one-fifth of the world's oil was transported through the Strait of Hormuz. The blockade will further exacerbate supply squeezes, affecting not only crude oil but also pushing up prices of commodities such as fertilizers and helium, which are key inputs for food production and semiconductor manufacturing, thus exacerbating already accelerating inflation.
Trita Parsi, executive vice president of the Quincy Institute, warned on CNBC that lockdowns would remove more oil from the market, potentially pushing oil prices to around $150 per barrel. Ben Emons, managing director of Fed Watch Advisors, also pointed out that fertilizer and helium prices will continue to rise, fueling inflationary pressures.
Compared to the energy crisis of the 1970s
International Energy Agency (IEA) Executive Director Fatih Birol said last week that the current disruption of the Strait of Hormuz is the worst energy shock in the world's history, more severe than the oil crisis of the 1970s and the Russia-Ukraine conflict combined.
S&P Global Vice Chairman Daniel Yergin pointed out that the scale of this disruption is unprecedented, far exceeding events such as the 1970s oil crisis, the Iran-Iraq War, or the 1990 Iraqi invasion of Kuwait.
David Lubin, a senior fellow at Chatham House, believes that despite the severity of the impact, the global economy's dependence on oil has decreased, with oil consumption per unit of GDP now around 40% of what it was in the early 1970s. Wind, solar, and nuclear power have also diversified the energy mix. However, if the conflict escalates further, the energy shock could reach the severity of that of the 1970s.
IMF and World Bank officials have indicated they will lower global economic growth forecasts and raise inflation expectations, with emerging markets expected to be hit hardest. Barclays warns that the economic scars left by damage to energy facilities and ports in Iran and other Gulf states could suppress supply in emerging Asia for a long time.
Negotiation strategy or misjudgment of risk
Some analysts view the blockade as a pressure tactic rather than an eventual escalation. Trita Parsi points out that since neither side has explicitly stated that negotiations will not resume or the ceasefire will end, all actions should be viewed as tactics and threats within the negotiations.
Brian Jacobsen, chief economist at Annex Wealth Management, is cautiously optimistic, believing Washington may grant allied ships exemptions from safe passage. However, Ben Emons warns that this strategy, aimed at forcing Iran to submit, could easily trigger a retaliation and a new round of military escalation.
Iran's Islamic Revolutionary Guard Corps issued a strong warning last Sunday, stating that any warship approaching the Strait of Hormuz under any pretext would be considered a violation of the ceasefire, and that enemies would be drawn into a "deadly vortex." Furthermore, the blockade is controversial under international law, and the United States does not have the legal authority to close or obstruct passage through the Strait.
Editor's Summary
Trump's decision to block the Strait of Hormuz has further escalated the risk of a global energy crisis following the breakdown of US-Iran negotiations. Oil prices have surged in the short term, and supply chain disruptions could impact the fertilizer, food, and semiconductor industries. Although current market reactions have been relatively restrained, and the global economy's energy intensity has decreased, historical experience shows that prolonged disruptions will lead to severe inflationary and growth pressures. The ultimate outcome depends on whether both sides return to negotiations and whether the blockade escalates into a broader confrontation.
Frequently Asked Questions
Q: How much actual impact will a blockade of the Strait of Hormuz have on global oil supply?
A: The Strait of Hormuz originally handled about 20% of global oil shipments. Since the outbreak of the conflict, traffic has been drastically reduced to a trickle. A blockade would further cut off shipping from Iranian ports, widening the supply gap. Analysts predict this could push oil prices up to $150 per barrel and cause further increases in the prices of commodities such as fertilizers, impacting global food production and industrial supply chains.
Q: How severe is this energy crisis compared to the oil crisis of the 1970s?
A: International Energy Agency Executive Director Fatih Birol stated that this crisis is the most severe energy shock in history, surpassing the combined impact of the two oil crises of the 1970s and the Russia-Ukraine conflict. S&P Global's Daniel Yergin also pointed out that its scale far exceeds any previous event. However, the current global economy's reduced dependence on oil and more diversified energy structure may make it slightly more resilient to the shock than in the 1970s.
Q: Is Trump's lockdown order a negotiating tactic or could it lead to a military miscalculation?
A: Some analysts believe this is a negotiating tactic to pressure Iran, as neither side has formally announced the end of the ceasefire. However, the Iranian Revolutionary Guard has warned that any warship approaching the Strait will be considered a violation of the ceasefire and could trigger a retaliation. Experts also point out that the blockade lacks a basis in international law and carries the risk of miscalculation and escalation into a wider conflict.
Q: Will oil prices remain high in the short term? What is the long-term outlook?
A: Following the announcement of the blockade, US crude oil prices surged. Prices had previously retreated during the ceasefire period, but the threat of a blockade could push prices back above $105 or even higher. Short-term volatility will continue. However, if the US and Iran return to negotiations or the situation eases, supply shortages may ease, and oil prices could fall. The IMF and World Bank have lowered their global growth forecasts and raised their inflation expectations, with emerging markets being the most affected.
At 15:29 Beijing time, US crude oil futures were trading at $103.48 per barrel.
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