For whom will it soon be too late? A thoughtful Donald Trump in the White House.Image: keystone
According to one expert, the closure of the Strait of Hormuz threatens to cause a “catastrophic shock”.
Mar 28, 2026, 3:54 p.mMar 28, 2026, 3:54 p.m
Iran should get serious about negotiations soon before it is too late, threatens US President Donald Trump on his own platform Truth Social. “Because once that happens, there will be NO GOING BACK, and that won’t be a pretty sight!”
Trump, of course, thinks there will soon be no turning back for Iran. However, according to experts, this is not the case. If the Strait of Hormuz is not cleared soon, it will be too late for Trump. There will be no turning back for the USA and the sight will not be pretty.
The consequences are so “unthinkably great” that the markets ignore them, says oil expert Rory Johnston in an interview with Bloomberg TV. The TV presenter probably thought this was doom and gloom and countered with the ironic question of whether a permanent ban was really “the end of days”. But the answer he got was “yes”.
The blockage leaves a hole in the global oil supply that is so large that it simply cannot be filled. To clarify the scale and illustrate what the world would have to do to save so much oil, Johnston drew a comparison with Corona: the streets would have to be as deserted again and there would have to be as few planes in the sky as in the lockdown of March and April 2020.
The world could, of course, try to narrow the supply gap. To do this, it would increase oil production elsewhere than in the Middle East or somehow bypass the Strait of Hormuz. But according to Johnston, none of this would be enough and there would still be too much oil missing. And that’s why Johnston has no doubt that if the road remains closed, the result will be a “catastrophic economic shock.”
Crude oil price explodes to all-time high
Johnston outlined this shock in an essay for The Dispatch magazine. If the road remains closed, the world market price for crude oil will “explode to an all-time high” – and possibly even higher. This high was reached in 2008 at a price of $147 per barrel, which adjusted for inflation would be $223 today. This means that the price of oil would have almost quadrupled compared to the beginning of the year.
This oil price shock would cause the prices of gasoline, diesel, heating oil and airline tickets to rise “unbearably,” as Johnston writes. In wealthy countries, people would pay these higher prices without making any major changes to their lifestyle. They have to accept that they have less money for everything else and that the oil price shock acts like a tax on them. Whatever the petrol costs you more, you save on visits to restaurants or on holiday plans. Companies affected by this austerity requirement would make layoffs. In the end, the statisticians give it a name: recession.
In Trump’s words, none of this would be a pretty sight. But things would get ugly in the poorer countries. According to Johnston, there would be a fuel shortage like that experienced by Cuba, which is under a US blockade. The state has rationed gasoline there and people wait days for their rations. Johnston speaks of “catastrophic reductions in living standards”. The statisticians call it a very severe recession, a depression.
Johnston’s conclusion is as follows:
“There is simply no other option: shipping traffic through the Strait of Hormuz must be resumed to avert a catastrophic economic shock.”
Of course there are counterarguments against this drastic forecast. If everything is supposed to be so bad, why doesn’t the oil barrel now cost over $200 instead of just over $100? Johnston and other experts actually wonder about this. They speak of “irrational optimism,” “astonishing complacency,” or “sleepwalking into the greatest energy crisis in history.”
One explanation could be that the price of oil is currently still largely determined by market sentiment. At the current price of almost $110, you won’t get the barrel the next day. You paid today and will receive delivery about a month later. And by then, the “irrationally optimistic” markets probably hope, the road will be clear again and Trump will rage elsewhere. Back in Greenland. Or in Cuba.
The crisis comes by sea
The markets can remain in this optimism because oil is not yet physically scarce. Because supertankers loaded with oil are still arriving in Asia. They started in the Middle East before the war began and needed three to four weeks to get there. However, nothing comes after them. With this “nothing” physical scarcity reaches Asia. And so the global competition for the remaining oil begins. In Johnston’s words: The crisis is on the way, prices are still being shaken up.
The Strait of Hormuz: Its closure was always considered a horror scenario.Image: Wikimedia
This reading of events is consistent with the fact that oil is significantly more expensive where it will soon be needed. Immediate physical delivery in the Middle East currently costs well over $100 – over $160 in fact. In Singapore, aircraft kerosene is already trading at over $200. Such prices show where the price of crude oil could go.
“The oil market is becoming more and more indifferent to this nonsense”
Trump has been able to prevent this so far by repeatedly calming the market. Among other things, he promised that the war would soon be over. But his words seem to be losing their impact. When he pushed back the deadline for concluding negotiations by ten days, the price of oil fell only slightly and immediately shot back. Johnston comments: “The oil market is becoming more and more indifferent to this nonsense.”