analysis
If Trump loses his way in Iran, demand will be destroyed and this will require very high oil prices.
Mar 17, 2026, 9:32 p.mMar 17, 2026, 9:32 p.m
“Be prepared for oil prices to rise to $200 a barrel,” says an Iranian spokesman. It was a threat addressed to Donald Trump. But unfortunately not an empty one.
A tired Trump without orange paint on his face: Has he overreached himself in Iran?Image: keystone
Several experts have looked at what Trump has done to the global oil market with his Iran war. And they come to a conclusion similar to that of Olivier Blanchard, former chief economist at the International Monetary Fund: “All of this leads me to conclude that prices are between 150 and 200 dollars per barrel – or more, but I hesitate to give higher figures.”
Blanchard took to social media to explain how he arrived at this $200 scenario.
Everything depends on the Strait of Hormuz. In normal times, 20 million barrels full of oil pass through there every day. With the start of the war, however, Iran did what all experts had warned about in the event of war and what the Trump administration had nevertheless not prepared for: it almost completely shut down the road.
This means that around 20 percent of the global oil supply will be lost. And this more or less from one day to the next. The International Energy Agency therefore speaks of the “biggest shock in the history of the global oil market”. That is the starting point.
Trump is now trying to clear the road again. However, when economist Blanchard reads what military experts think about this, their conclusion is sobering: “It is practically impossible to completely protect ships in the Strait of Hormuz. There is not enough time to intercept missiles or drones.”
The road is very narrow and can easily be reached anywhere from the Iranian coast using drones. With drones, the world has entered a new era, says military historian Philips O’Brien in one interview. “Today it is impossible to completely eliminate the enemy’s air force.”
So Trump won’t achieve his goal. Instead, he could try to end the war. He would declare victory on some flimsy justification and launch the next attack somewhere else in the world. According to US Senator Lindsey Graham, that will be in Cuba.
Trump administration is acting poorly in the war
But this time out is not available to him. Iran can continue to threaten to attack ships passing through the Strait. Trump would have to give the regime credible assurances that he would not bomb it again in a few months. That would be tantamount to kneeling.
From all of this, Blanchard concludes: “The danger will remain great that most ships will not want to take the risk.” The 20 million barrels will probably be missing for a long time.
The fact that Trump is desperate and… also speaks in favor of a long interruption seems overwhelmed.
According to experts, his two representatives – both real estate developers – were already professional in the negotiations not up to par and did not rely on experts from the administration support. At the same time, Jared Kushner was soliciting money for his private life in the Middle East company.
Before the war, Trump failed to prepare for the world-famous Iranian drones and then had to ask Ukraine for help. At the beginning of the war, the US Air Force accidentally shelled a girls’ school in Iran, committing one of the greatest war crimes in US history.
The air force has lost three expensive aircraft due to a fire from friendly Kuwait. The military historian O’Brien is not aware of a more expensive case of such friendly fire. A US operations center in Kuwait was not protected from an Iranian retaliation, resulting in the deaths of 6 US soldiers and dozens of injuries.
Trump went into this war without even informing the US’s traditional allies. Now he is threatening them with the end of the common NATO defense alliance if they do not help him. And Trump has exposed his own government to global ridicule by giving all his ministers new shoes gifted has, but doesn’t know its size.
Secretary of State Marco Rubio doesn’t dare not wear the shoes and is now walking in a lot big shoes around. This episode shows that Trump created a culture around himself in which no one dared to contradict him, says military historian O’Brien. “In such a climate, very bad decisions are made.”
If Trump can’t open the Strait of Hormuz, he still has this option: replace the loss with additional production. However, that won’t work either.
Trump wants to hit his head against the wall
An additional 2 million barrels of oil can be produced quickly every day. Trump can only extract 3 to 4 million barrels a day from the strategic oil reserves. So Trump may threaten, curse and otherwise try to bang his head against a wall: According to Blanchard, the global economy will be short of around 15 million barrels of oil in the long term.
Who dares to pass through? A man walks along the coast of the Strait of Hormuz in the United Arab Emirates.Image: keystone
If Trump hits the wall, the market will play. In economist’s jargon, demand falls until it equals supply again and market equilibrium is established. Stock marketers prefer to speak of “destruction of demand”.
The price of oil is rising so high that drivers are taking the bus and vacationers are no longer taking the plane but the train to the neighboring country. Companies with high oil consumption produce fewer goods or even go out of business. Shoppers shop less because they have less money to do so. And so on and so forth. Until, in the worst case scenario, the entire economy ends up in a recession.
So the big question is how high the price of oil has to rise until around 15 million fewer oil barrels are consumed worldwide every day? And the answer, according to Blanchard, is: “Up to $150 to $200 per barrel – or more, but I hesitate to give higher numbers.”