Trump’s time runs out on Hormuz crisis
Oil prices have dipped below $70 per barrel, but analysts warn a return to $90 is likely as tensions in the Strait of Hormuz persist. With no clear long-term peace deal in sight, the strait’s traffic is unlikely to recover to normal levels for months, complicating efforts to meet rising demand from China and refineries. Energy analysts told Fortune that the situation could create a nightmare scenario for the Trump administration, which seeks to lower fuel prices ahead of the November midterm elections.
Marshall Adkins, head of energy at Raymond James, said the market is underestimating the long-term risks. “The market thinks, ‘Oh yeah, things are going back to normal.’ But, watching Iran for as long I have, I don’t think that’s really going to happen,” he said. Iran’s history of instability over the past 45 years suggests a return to normal traffic levels in the strait is unlikely, he added.
President Donald Trump declared the interim peace deal with Iran “over” after renewed drone and rocket exchanges. His comments, which included harsh language toward Iranian leaders, contrast sharply with his earlier characterization of them as “very rational people.” Trump’s administration has also revoked Iran’s waiver to sell oil globally without sanctions, though U.S. benchmark oil prices remain volatile.
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The strait’s traffic disruptions have already triggered supply chain shifts, with refineries adjusting operations to compensate for reduced imports. Analysts caution that prolonged disruptions could further strain global energy markets, particularly in regions dependent on Middle Eastern exports.
Arjun Murti of Veriten Research said the Middle East and OPEC will remain central to the energy world, despite potential weakening. He argued that countries will likely push to develop their own energy resources to reduce reliance on imports. “You must have some control over your energy sources and technologies,” he said, emphasizing the geopolitical risks baked into oil prices for the foreseeable future.
Arjun Murti of Veriten Research said the Middle East and OPEC will remain central to the energy world, despite potential weakening. He argued that countries will likely push to develop their own energy resources to reduce reliance on imports. “You must have some control over your energy sources and technologies,” he said, emphasizing the geopolitical risks baked into oil prices for the foreseeable future.
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Arjun Murti of Veriten Research said the Middle East and OPEC will remain central to the energy world, despite potential weakening. He argued that countries will likely push to develop their own energy resources to reduce reliance on imports. “You must have some control over your energy sources and technologies,” he said, emphasizing the geopolitical risks baked into oil prices for the foreseeable future.
Arjun Murti of Veriten Research said the Middle East and OPEC will remain central to the energy world, despite potential weakening. He argued that countries will likely push to develop their own energy resources to reduce reliance on imports. “You must have some control over your energy sources and technologies,” he said, emphasizing the geopolitical risks baked into oil prices for the foreseeable future.
