We've lost about 1.2 billion barrels of oil so far from Hormuz closure: S&P Global's Dan Yergin

4/27/2026 7:46:28 AM	short term cautious up	6 days later	+6.49%	+3.25%
4/25/2026 4:10:08 PM	medium term cautious up	21 days later	+6.26%	+3.13%
4/25/2026 4:09:01 PM	medium term cautious up	21 days later	+6.26%	+3.13%
3/8/2026 2:50:43 PM	short term up	7 days later	-1.34%	-1.34%
10/2/2025 12:57:56 PM	short term cautious down	5 days later	+2.74%	-1.37%

As the Strait of Hormuz remains closed, global oil supplies are plummeting, which could set the stage for a summer price spike. We're trying to understand the price direction and how quickly it could come down if a deal is reached.

Speaker1

Speaker2

Inventories that helped keep prices from going too high are getting drained out. Before the crisis, about 135 ships per day went through the Strait of Hormuz; in May it's been 9 ships per day, losing about 1.2 billion barrels of oil so far.

This is the key factor driving prices higher.

Two months ago, some people were predicting oil prices would be in the 200s by now.

Speaker1

Speaker2

I wouldn't have said that because I knew about inventories and alternative supplies. The key question was how long the crisis would go on. Iranians are solidifying control via the Persian Gulf Strait Authority, requiring ships to fill out forms and pay tolls, which is unacceptable to Arab countries as money goes to IRGC.

This solidification of control makes a quick resolution less likely.

Do you think a deal is even possible?

Speaker1

Speaker2

Deals are what the Trump administration is about, but we seem pretty far away from it right now. Iranians know they have a strong position through control of the Strait.

Their leverage is not nuclear but control of the waterway.

If you were a betting man, where do you think crude goes?

Speaker1

Speaker2

It goes higher. I'm not going to put $150 or $200 on it, but we're entering the season of increased driving and air travel, so the call on fuel will go up. Actual cargo prices are higher than futures, indicating a shortage.

Futures prices dip on deal rumors, but physical cargo prices remain high, showing real shortage.

The White House argues that if a deal is reached, oil prices would come down materially and shockingly quickly. Is that true?

Speaker1

Speaker2

The price would absolutely come down when a deal happens, but the crisis doesn't end in a single day. Cleanup would take about six months to get everything back to normal. If back to surplus, prices would probably be in the 60s or 70s or 80s.

Before the military buildup, oil was in the 60s. Prices would come down but not get fixed quickly.

We're getting close to midterms, so there's political calculus for the president to reach a deal to bring oil prices down. If you're telling me it's six months...

Speaker1

Speaker2

Six months to get the whole thing fixed. But if there's an announcement of a deal, there would be a giant sigh of relief and prices would come down, maybe not to 60, maybe to 80 or something like that.

The immediate psychological impact would lower prices even before full normalization.

Viewers ask about the transmission mechanism to US gas station prices and whether stations are gouging.

Speaker1

Speaker2

No, it reflects market forces. Prices are going up because demand is going up and product is being exported. The US has been a source of exports replacing some of those barrels, which has kept prices from going much higher.

Many gasoline stations exist, so competition limits gouging.

What is the tax or toll for passing through the Strait?

Speaker1

Speaker2

The number quoted is $2 million. Friends of Iran might not be charged, but others must fill out forms and email them to IRGC for approval.

This is a new bureaucratic hurdle that solidifies Iranian control.

How do you see that changing? Also, what about insurance costs?

Speaker1

Speaker2

Insurance is available but much higher. The captain must decide if he wants to risk his crew being attacked. One ship owner with a Filipino crew was told by the Filipino government not to move the ship.

Crew safety concerns add another layer of disruption.

What about the US ferrying or protecting these boats through the Strait?

Speaker1

Speaker2

We've done that in the past, like in the 1980s. The difference now is we're in a world of drones, and you don't know where vulnerability will come from. That problem has not been solved.

Drones create asymmetric threats that are harder to defend against than mines.

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