President Trump is finding his room to maneuver increasingly restricted. Formally, Washington speaks the language of strength, sanctions, naval fleets, air power, blockades, and ultimatums. However, the real power in this war is shifting toward a place frequently underestimated: the narrow maritime corridor between Iran and Oman. The Strait of Hormuz has become more than just a geographic point on a map. It has transformed into the primary master switch for global energy, a mechanism for exerting pressure on markets, central banks, insurance companies, Asian economies, European industry, and the White House itself.
This is the central paradox of the current crisis. The United States and Israel counted on military superiority, technological strikes, the destruction of Iranian infrastructure, the political demoralization of Tehran, and forcing concessions. Yet, Iran responded with more than just missiles and drones. It struck the most sensitive nerve of the global economy: energy logistics. If a tanker cannot pass through Hormuz, if an insurer raises premiums, if freight costs soar, if refineries stop receiving feedstock, if diesel crack spreads climb, and if jet fuel and fuel oil begin to drive inflation, then the war ceases to be regional. It becomes a tax on the entire world.
According to the U.S. Energy Information Administration, about 20 million barrels of oil and petroleum products passed through Hormuz daily in 2024, accounting for approximately one-fifth of global liquid hydrocarbon consumption. This same corridor handled roughly one-fifth of global LNG trade, primarily Qatari gas. Approximately 84% of the crude oil and condensate passing through Hormuz was destined for Asia, with China, India, Japan, and South Korea serving as the primary consumers. Therefore, a strike on Hormuz is not merely a strike against Washington; it is a blow to the factories of China, the refineries of India, the energy security of Japan, the gas balance of South Korea, and the entire Asian model of industrial growth.
Why the Barrel Has Not Reached $200 – and Why That Does Not Mean the Crisis Is Under Control
At first glance, it might appear that the market has held up. Oil has not stabilized at $200 per barrel, global trade has not halted, stock indices have not collapsed, and some investors have even continued to indulge in technological optimism, as if the war in the Persian Gulf were mere background noise. However, this is a dangerous illusion. The market has not endured the crisis; it has bought time. And it bought it at a steep price.
Before the war, the global oil market was entering a phase of relative surplus. Commercial inventories were higher than in a classic deficit situation. Some consumers held reserves of petroleum products. China was able to temporarily reduce import activity by using accumulated stocks and adjusting procurement. The U.S. and its allies utilized a strategic reserve mechanism. According to Reuters, citing Fatih Birol, the coordinated release of strategic reserves totaled approximately 400 million barrels, yet even this does not solve the problem if physical logistics through Hormuz remain disrupted.
In other words, oil has not yet become absolutely inaccessible because the world has begun to consume its own savings. This is not normalization. This is the liquidation of the safety cushion. When a household loses income, it can live off savings for a while. But savings are not a business model. Likewise, the oil market cannot infinitely compensate for the loss of the Middle East by selling off reserves, rerouting tankers, increasing production in the Atlantic basin, and conducting nervous spot-market deals.
The International Energy Agency reported in its May assessment that global oil supply in April fell by another 1.8 million barrels per day, down to 95.1 million barrels per day. Cumulative losses since February have reached 12.8 million barrels per day, and output from Gulf nations affected by the closure of Hormuz ended up 14.4 million barrels per day below pre-war levels. This is no longer just a standard geopolitical premium. This is a physical rupture between demand, refining, logistics, and available raw materials.
Inventories Are Melting Faster Than Politicians Can Say "De-escalation"
The most important metric right now is not just the price of Brent. The primary indicator is the rate of inventory depletion. According to the IEA, observed global oil stocks declined by 129 million barrels in March and by another 117 million barrels in April. Onshore stocks in April fell by 170 million barrels, while OECD inventories shrank by 146 million barrels. This signifies that the market is in a state of forced drawdown—the involuntary withdrawal of stocks from the system.
This is particularly dangerous ahead of the summer season. In the Northern Hemisphere, June, July, and August traditionally bring increased demand for gasoline, jet kerosene, diesel, and petrochemicals. The tourist season, freight shipping, agriculture, air conditioning, and air travel all drive consumption higher. If the market enters the summer with melting inventories and restricted access to Middle Eastern flows, the price mechanism becomes increasingly rigid: to balance supply and demand, the price must not only rise but must actively destroy part of the demand.
This is known as demand destruction through pricing. When fuel becomes too expensive, airlines cancel routes, logistics companies raise tariffs, households drive less, industry reduces capacity, and weak economies cut imports. The market balances, but not in a civilized manner; it balances through pain.
Fatih Birol has already warned that the oil market could enter the "red zone" in July or August if the situation does not improve. According to him, the only key solution remains the full and unconditional opening of the Strait of Hormuz. This is not a diplomatic figure of speech. It is an admission that strategic reserves, commercial stocks, and alternative supplies cannot long replace the planet’s largest energy corridor.
Iran Found America’s Weak Point: Not Aircraft Carriers, but Gas Stations
Trump may speak of strength, but American politics always hinges on the price of gasoline. For the U.S., the energy shock functions differently than it does for China, India, or Europe. America is itself the largest producer of oil and gas. It is less dependent on imports from the Persian Gulf than it was in the 1970s. In 2024, the U.S. imported approximately 0.5 million barrels per day of crude oil and condensate from Persian Gulf countries through Hormuz—about 7% of American crude oil and condensate imports and roughly 2% of domestic liquid fuel consumption.
However, there is no such thing as complete autonomy in the global oil market. Even if a barrel is produced in Texas, its price is formed within the global system. Brent, WTI, freight, insurance, export arbitrages, refinery throughput, seasonality, and diesel margins are all interconnected. If Middle Eastern volumes disappear, it is not just imported oil that becomes expensive. The entire energy chain does.
This is precisely why the war hits Trump politically. His return to the White House was tied to a promise to reduce inflation and regain control over the cost of living. Yet, the energy shock does the opposite. In April, the PCE index, the Federal Reserve’s key inflation indicator, rose by 3.8% year-on-year, and the core PCE by 3.3%. Gasoline in the U.S., according to published data, has increased in price by more than 50% since the start of the war, and rising prices have begun to pressure real incomes and consumer spending.
This is the essence of the Iranian asymmetry. Tehran does not need to defeat the U.S. in a classical military sense. It is enough to make the continuation of the war economically toxic for the White House. The longer Hormuz remains closed or semi-closed, the higher the inflation, the stronger the pressure on the Fed, the more difficult it is to lower interest rates, the more expensive the debt, the more nervous the markets, and the more dangerous the political cycle becomes for Republicans.
Prices Are Volatile Not Because Traders Are Panicking, but Because the Physical Market Is Broken
Current oil volatility is not merely a matter of emotion. It is a reflection of the fact that the market has lost its normal structure. Reuters reported that on May 26, Brent rose by approximately 4% and closed near $99.58 per barrel following new U.S. strikes on Iran, which dashed hopes for a quick agreement regarding Hormuz. Yet, a few days later, the market declined again amid reports of a possible truce extension and the prospect of opening the strait, with Brent trading near $92 per barrel.
This is not stability. This is a market that trades in headlines rather than oil. One rumor of negotiations in Doha and quotes fall. One strike on Hormozgan and the risk premium returns. One tanker passes through the strait and the market exhales. One explosion off the coast of Oman and insurers recalculate the war risk. In such conditions, the forward curve, freight rates, and crack spreads are no less important than the price of Brent itself.
The market for middle distillates—diesel, jet fuel, and gasoil—is particularly sensitive. These are the circulatory system of global trade. The consumer sees gasoline, but diesel powers trucks, ports, generators, farms, containers, mines, and construction sites. If an oil crisis transitions into a petroleum product crisis, inflation becomes deeper and more persistent. It ceases to be purely energy-related and begins to seep into food, logistics, fertilizers, metals, and consumer goods.
Why Hormuz Cannot Simply Be Replaced by Pipelines
One of the most popular delusions regarding the current crisis is the thesis that Gulf oil can be quickly redirected via bypass routes. Yes, such routes exist. However, their capacity is limited, and part of the infrastructure is already in use.
Saudi Arabia has the East-West pipeline to the port of Yanbu on the Red Sea. The UAE possesses a pipeline to Fujairah that allows for bypassing Hormuz. But, according to EIA estimates, the available additional bypass capacity of Saudi Arabia and the UAE in the event of a disruption is about 2.6 million barrels per day. This is significant, but it is incomparable to the volume that typically passes through the strait. The Iranian Goreh-Jask pipeline has an effective capacity of about 300,000 barrels per day, but it was used extremely sparingly in 2024.
In other words, Hormuz is not a route that can be replaced by a single directive. It is a bottleneck around which the energy geography of the world has been built for decades. Refineries are calibrated to specific grades of oil. Contracts are tied to specific terminals. Tanker chains are calculated for specific delivery routes. Insurance and financing are structured under familiar risks. When this mechanism breaks, it cannot be reassembled in a week.
The Global Economy Is Entering an Era of Expensive Security
The main result of the crisis is already clear: the previous model of energy globalization has cracked. Even if Hormuz opens tomorrow, even if Tehran and Washington sign an interim agreement, even if tankers pass through the strait again, the market will not return to its pre-war state. Risk has already become part of the price.
Consumers will create additional reserves. Importers will diversify supplies. Exporters will invest in bypass infrastructure. Insurance companies will factor in a war premium. Refineries will revise their raw material portfolios. States will begin to intervene more actively in energy, because the free market works well in normal times, but it responds poorly to the question: what to do if a strategic strait turns into a weapon?
In this sense, Hormuz has become an accelerator of deglobalization. The world is moving away from the "buy where it is cheapest" model to the "buy where it is politically safest" model. Price is giving way to reliability. Efficiency is yielding to redundancy. Free trade is being replaced by bloc logic. Energy is once again becoming not just a market, but an extension of foreign policy.
The IMF already describes the global economy as a system living "in the shadow of war": global GDP growth in 2026 is projected at 3.1%, and in 2027 at 3.2%, while inflationary pressures are intensifying again, and risks are skewed to the downside. Commodity-importing countries with high debt, weak currencies, and limited budget buffers are particularly vulnerable.
For Asia, It Is an Energy Shock. For Europe, an Inflationary One. For the U.S., a Political One.
The Hormuz crisis hits different power centers in different ways. For Asia, it is primarily a risk of physical availability of raw materials. China, India, Japan, and South Korea have spent decades building an industrial model around stable maritime imports. Now they see that a single regional conflict is capable of questioning the very architecture of their energy security.
For Europe, it is primarily an inflationary and industrial blow. After 2022, Europe has already experienced the rupture with the Russian energy model, high gas prices, the deindustrialization of specific sectors, rising subsidy costs, and a painful restructuring of supply chains. The new Middle East crisis means that the European economy is once again receiving expensive energy, expensive fertilizers, expensive logistics, and a rigid monetary policy environment.
For the U.S., it is a political problem. America can produce oil, but it cannot isolate itself from the global price. Trump may demand victory, but the voter sees the gas station, the interest rate, the grocery basket, and utility bills. If war turns into an inflationary shock, it ceases to be a foreign policy plot and becomes an internal electoral risk.
Iran understands this. That is exactly why Tehran is in no hurry to give up its main lever without serious concessions. Opening Hormuz means relieving pressure on the White House. Maintaining limited transit means keeping Trump in a state of constant negotiation. This is not the romanticism of resistance. This is cold geoeconomics.
The World Has Already Paid for This War – The Question Is Who Receives the Bill First
The World Bank forecasts that Brent in 2026 will average about $86 per barrel, compared to $69 in 2025, but this forecast is based on an important assumption: the most acute phase of disruptions must end, and shipping through Hormuz must gradually return to pre-war levels by the end of 2026. If this does not happen, the price corridor will be higher, and the inflationary consequences more severe.
This is where the main point lies. Today, the oil market is assessing not only the war. It is assessing the probability of peace. If an agreement is reached, prices may temporarily fall. If the agreement fails, the market will quickly return the risk premium. But even peace will not cancel the need to replenish reserves, restore infrastructure, lower insurance premiums, regain the trust of shipowners, and redistribute flows. The physical market does not obey press releases.
The joint statement by the heads of the IEA, IMF, World Bank, and WTO on May 29 became a signal that the crisis had shifted from a category of regional security to a category of systemic threat to the world economy. These organizations directly linked war, energy, trade, and economic sustainability, emphasizing the need for coordination of the international response.
Trump Wanted to Force Iran to Capitulate. Iran Is Forcing Trump to Make a Deal.
The war has shown a reality that is unpleasant for Washington: military superiority does not always translate into strategic control. The U.S. can launch strikes, impose sanctions, strengthen naval presence, pressure intermediaries, and speak the language of ultimatums. But if Iran is capable of holding Hormuz under threat, it maintains a lever that Washington cannot ignore.
This does not mean that Iran is all-powerful. Its economy is worn out by sanctions, infrastructure is vulnerable, the currency is weak, the population is tired of pressure, and military escalation carries huge risks for Tehran. But in the specific configuration of the crisis, Iran possesses what in political economy is called asymmetric leverage. It may lose in aviation, technology, and financial access, but it wins in time and the price of risk.
For Trump, the problem is that every subsequent month of the war makes a deal not less, but more necessary. The lower the reserves, the higher the insurance premiums, the tougher the inflation, the more nervous the Fed, the more expensive the continuation of the conflict becomes. In this logic, peace becomes not a gesture of goodwill, but an instrument of financial stabilization.
An Ending Without Illusions: Oil Will Not Run Out, but the Cheap Peace Has Already Ended
Oil will not literally run out. The world will not be left without barrels. But something else may end: the habitual confidence that the global market will regulate everything itself, that tankers will always arrive on time, that strategic reserves are infinite, that military force automatically opens maritime routes, and that the price of gasoline obeys campaign promises.
The Iranian war has shown: energy security has again become the main language of world politics. Hormuz has proven that a bottleneck can be stronger than an aircraft carrier strike group if it is embedded in the circulatory system of the world economy. Trump wanted to force Iran to peace through strength. But now he has found himself in a situation where he needs peace no less than Tehran does.
The question is no longer whether oil will rise to $200. The question is how long the global economy can live on reserves, verbal interventions, and the hope for a "nearly ready" deal. If Hormuz is not opened fully and sustainably, July and August could be the moment when the market stops believing the statements of politicians and starts believing only in the physics of the barrel.
And the physics of the barrel is simple: if the oil does not flow, the price goes up.