analysis
No, in journalism you shouldn’t use alarmism carelessly – even if bad reports (unfortunately) usually generate more attention. When it comes to the economic consequences of the Iran war, however, there are increasing signs that this may still be the case too little Alarmism reigns.
April 30, 2026, 7:35 p.mApril 30, 2026, 7:35 p.m
The price of oil has not been this high since the outbreak of the Russian war of aggression in Ukraine: on Thursday, a barrel of the reference Brent crude temporarily exceeded 126 US dollars. He recovered somewhat over the course of Thursday. However, this climax may not have been the last.
But first: What was the trigger?
The increase follows several events in recent days that have made it increasingly clear: Despite the official ceasefire between the USA and Iran, there is no detente in sight – on the contrary. On Wednesday, President Trump told the US portal Axioshe will maintain the naval blockade against Iran until the regime agrees to an agreement that takes into account “US concerns about its nuclear program.” US military commanders also informed the president of a plan for a “short and powerful” wave of attacks against Iran in order to force Tehran to accelerate peace talks.
The US President told “Axios”: “The blockade is somewhat more effective than the bombing. You suffocate like a stuffed pig [Original: ‹like a stuffed pig›]. And it’s going to get worse for them.”
The Strait of Hormuz is currently blocked twice: by the Iranian government, but also by the US government, which is insisting on preventing shipping traffic to and from Iranian ports.
According to the Financial Times, Trump and his advisors also recently met with executives from oil companies to discuss the effects of the blockade that has been ongoing for months.
All of this has thrown the oil markets into turmoil in the last few days – fears of escalation are once again prevailing.
Oil markets still in “La La Land”
There was recently some hope for the oil price, at least in the short term: On Tuesday, the United Arab Emirates (UAE) announced that to withdraw from the oil associations of oil-exporting countries OPEC and OPEC+. According to initial estimates from experts, this could lead to major upheavals in the oil market in the medium to long term: Since the UAE can now ramp up its production independently, it is expected that supply will increase in the future and that prices could therefore come under pressure.
But the markets had very little interest in this information, at least in the short term. The gap in the oil and gas market is too big since practically no ships can pass through the Strait of Hormuz. As a reminder, about a fifth of the global supply of oil, and even more in the case of natural gas, passes through the important strait.
IEA boss: Biggest energy crisis in history confirmed
The head of the International Energy Agency (IEA), Fatih Birol, sees his fears of the world’s largest energy crisis in history confirmed in view of the Iran war. Unfortunately, current events prove the IEA right, said Birol in Paris.
«The oil and gas markets are in great difficulty. “The last time I checked, oil prices were over $120, which is putting a lot of pressure on many countries.” In addition to oil and gas, fertilizers, which are very important for developing countries, and petrochemicals are also affected by supply bottlenecks.
“Our world is facing a major energy and economic policy challenge,” explained Birol. One of the questions is how this energy crisis will affect the energy industry and, beyond that, environmental issues. The crisis is leading to comprehensive responses by countries in terms of choice of partners, technologies and fuels, and it remains to be seen how these responses will affect global emissions. Birol spoke at a conference on the next world climate conference COP31 in November in Antalya, Turkey. (awp/sda/dpa)
image: keystone
The tenth week of the Iran war will soon begin – Donald Trump initially claimed that the whole thing would last a maximum of four to six weeks. The fact that prices are now rising to over $ 120, with the dwindling hope of a quick solution between the warring parties, is described by some as a “waking up of the markets”: the oil market has developed from “excessive optimism to the reality of the supply bottlenecks that we are currently experiencing in the Gulf,” wrote analysts at the financial service provider ING according to Financial Times to their customers. Another energy analyst said markets were starting to show the true price.
But these may still be overly optimistic analyses. At least that’s what the man, who is not known for thoughtless alarmism, says Economist. Under the title “The oil markets are still in La La Land,” the British newspaper writes: “As bad as the situation is, unfortunately the lack of reality continues.” Accordingly, the prices on the oil futures market, where speculators bet on the future development of the oil price, would massively misjudge the future. Specifically, if you follow oil prices in the future, they believe they will fall every month for the rest of the year. In other words: things should slowly get better from now on.
But there is no evidence of this at all. The Economist writes:
“If so, traders must assume that three things are true: that the United States and Iran will soon reach a peace agreement, that their agreement will reopen the Strait of Hormuz, and that gasoline and jet fuel will become abundant again soon after the Strait opens.”
However, all of this is “questionable”.
Economist: The consequences are still underestimated
According to experts, there would be a global recession if the blockade of the Strait of Hormuz lasts into the second half of the year. However, this may also be an optimistic view of things. Some, such as the well-known economist and Nobel Prize winner Paul Krugman, warn that most economists would assess the effects of the blockade on the entire global economy as “too optimistic”.
Paul Krugman in November 2025.Image: keystone
What seems logical at first glance to laypeople has long been viewed by analysts as not the most likely option: demand for oil will have to fall dramatically to match the lack of supply. Or: so that a market equilibrium is achieved.
But the price has to rise even further. The Economist explains why:
«There are three ways to restore market balance: free production capacity can be used; Inventories can be reduced to fill a remaining gap; and prices may rise to dampen demand.”
The first option is not possible due to the closure of the Strait of Hormuz alone, but also due to the destruction of many oil and gas facilities. And other producers, for example in the USA, could not expand their capacities quickly enough.
The second possibility of using inventories is, on the one hand, difficult to estimate, but on the other hand, it is already happening, according to the Economist. The release of legal reserves in various countries certainly helped to cushion the supply shock. But according to the Economist, the reserves would by no means be able to close the entire gap. And:
«The sensational announcement from March [zur Freigabe der Ölreserven] However, it came at a time when the governments of most IEA countries expected the Strait of Hormuz to reopen within weeks. With supplies from the Gulf now potentially disrupted indefinitely, they will not want to use up their reserves too quickly.”
In addition, and this is all too often forgotten: it is far from just oil and gas that are affected. Numerous other raw materials such as naphtha – an oil product that is processed into plastics and comes almost exclusively from the Gulf region – or helium, which is used to produce computer chips, are also in short supply – and there are no reserves there.
So the last option remains: global demand will have to fall. So back to economist Paul Krugman, who asks in a Substack post: How can global demand fall? He also speaks of three scenarios:
- First: People could switch from oil to other energy sources. But: “In the short term, the options for this are very limited.”
- Second: People can avoid economic activities that use a lot of oil – for example, they can take the bus instead of driving. “However, for many, perhaps even most, people, this option is very limited. For example, there are no buses in American suburbs, and there is no substitute for oil to power trucks in emerging markets.” This applies less to Europe and certainly not to Switzerland, but it is a problem for many countries.
- Third: “People can simply do less overall – consume less, produce less.”
Paul Krugman says: Oil consumption can – or must – be reduced by a global economic downturn.
The consequences are already visible
It is a circumstance that is slowly but surely becoming clearly visible: the German airline Lufthansa has already canceled 20,000 flights due to the lack of kerosene. In Asia, some countries have introduced a four-day week, others are limiting the opening times of their shops and in many parts of East Africa fuel stocks are already at a low level and mile-long queues at petrol stations are the order of the day.
Thousands of Lufthansa short-haul airlines are currently grounded.Image: keystone
Without running the risk of being overly alarmist, it can be said that the previous peak in oil prices was probably not the last. The $120 a barrel is still well below the $150 to $200 that many analysts had forecast in March if the Strait of Hormuz remained blocked for an extended period.
Paul Krugman points out that fortunately the world is no longer as dependent on fossil fuels as it was during previous oil shocks. Taking this into account, he still assumes a recession: “I don’t know how high the price of oil will rise if the strait remains closed, but it will – more or less by definition – have to rise so high that it causes serious damage.”
Or, as it is Economist in another article says:
“The world is just beginning to understand what could be coming.”