With the Closing of the Strait of Hormuz, How High Will the Price of Oil Go? By Brian Simpson
Michael Snyder on his Substack titled "Now That Iran Has Closed The Strait Of Hormuz, How High Will The Price Of Oil Go?" has an alarmist piece framing the ongoing U.S.-Israel military strikes on Iran (which began around February 28, 2026) as the start of a major war. Snyder claims Iran has already closed the Strait of Hormuz in retaliation — citing IRGC (Islamic Revolutionary Guard Corps) radio warnings to ships that "no ship is allowed to pass," plus reports of attacks on tankers (e.g., the Skylight and others) — and asserts that essentially no oil is moving through it right now. He treats this as a done fact, not speculation.
Key points from the essay:
The Strait handles ~13 million barrels per day (about 31% of seaborne-traded oil and a big chunk of global LNG), mainly from Gulf producers like Saudi Arabia, UAE, Iraq, Kuwait, and Iran itself to markets (especially Asia: China, India, Japan, South Korea).
With traffic "spooked" and halted, oil prices are poised to surge — potentially smashing past $70/barrel quickly and into triple digits ($100+) if the disruption lasts.
This could trigger a global recession "three times worse" than the 1970s oil crises (Arab embargo + Iranian revolution), with cascading effects: higher petrol/gasoline prices (already rising from ~$2.98/gallon in the U.S.), increased costs for transport, shipping, manufacturing, food/agriculture, plastics, etc.
Snyder quotes experts like Bob McNally (former energy official) warning of a guaranteed recession from prolonged closure, and draws parallels to past shocks.
His tone is urgent and dire: "buckle up and hold on tight" for a "wild ride" in the early stages of regional war, with Iran's regime possibly not surviving but the conflict dragging on.
Snyder cites sources like CNBC, Fox Business, Reuters, Yahoo, The Sun, USA Today, Daily Mail, and others for data on flows, warnings, attacks, and price scenarios.
Is this accurate about a full closure and imminent oil crisis? The post presents a worst-case view. Current reporting (as of early March 2026) shows a more nuanced picture:
Iran (via IRGC/state media) has claimed/declared the Strait "shut down" and broadcast warnings/threats prohibiting passage.
There have been attacks on vessels near or in the Strait (tankers hit, fires reported), causing major disruption.
Commercial traffic has plummeted dramatically — vessel transits down 40-70% in recent days per tracking data (e.g., MarineTraffic, Kpler, S&P Global), with many tankers halting, idling outside the area, or diverting. Major oil companies, traders, and insurers have suspended or withdrawn from the route due to risks.
However, it's not formally/officially closed in a legal or physical sense that blocks all passage under international law (UNCLOS protects transit rights unless physically prevented). Some limited traffic continues (e.g., Iranian/Chinese-flagged ships), and no full naval blockade or mining has been confirmed yet.
Analysts describe it as "effectively closed" or "de facto closed" for most commercial shipping due to threats, fear, and insurance issues — similar to Red Sea disruptions but on a much larger scale (20%+ of global oil/LNG flows at stake).
Oil markets have reacted with spikes, and prolonged issues could indeed push prices higher (analysts float US $100+ scenarios if it drags on), risking broader economic pain. But it's early-stage chaos in an escalating conflict, not a total, permanent shutdown. The situation remains fluid — U.S./allied forces could work to reopen secure passage, but escalation risks are high.
Thus, at present, there is no existential panic, but if the conflict drags on Snyder's pessimistic scenario could well play out, with economic pain for the West and Australia. Best to prepare today, rather than despair tomorrow.
https://michaeltsnyder.substack.com/p/now-that-iran-has-closed-the-straitl
