The markets have not felt the pain yet, but they cannot avoid it. Commodity analyst Rory Johnston says only small ships are moving through the Strait of Hormuz. The Very Large Crude Carriers (VLCCs) that carry 2 million barrels each have stopped since April 12th.
"Only small ships are moving. The 2-million-barrel giants that provide the world’s baseline energy are still missing."
- Rory Johnston, Macro Voices
Macro analyst Luke Gromen says the math is deterministic. The last VLCC transited on February 28th, and its cargo won't arrive until mid-April, creating a six-week hole in global supply. The physical shortage hits refineries sequentially, not simultaneously, which Gromen likens to 2008 and 2020. When it does, prices will spike nonlinearly. Dated Brent oil is already trading at $132 versus $100 for June futures, and a cargo in Sri Lanka was delivered at $286 a barrel.
The supply shock is also seasonal and irreversible. Fertilizer shipments have a hard deadline. Gromen warns that if the Strait remains blocked through spring, farmers will miss the planting window for the Northern Hemisphere. This creates a delayed inflation bomb for 2027 regardless of when the war ends.
Iranian advisor Mohammad Marandi argues Tehran is betting on this economic pain to force a resolution. He believes maintaining control over the Strait can push the global economy toward a 1929-style depression. This is Iran's leverage against a US administration Marandi calls "incapable of pursuing its own interests."
"Iran can push the global economy toward a 1929-style depression. This is the only way to force Washington to prioritize its own interests."
- Mohammad Marandi, Breaking Points
The US strategy is an economic blockade, not a ceasefire. Shashank Joshi says the blockade targets any ship from Iranian ports, aiming to sever Iran's hard currency lifeline. The US has already seized 10 tankers linked to Venezuela in the last six months, demonstrating its enforcement capacity. Joshi doubts Iran will fold quickly; it survived exports below 400,000 barrels per day in 2020 and can endure using floating storage and credit lines.
The core financial threat is to the dollar itself. Gromen frames this as a US "Suez moment" akin to 1956. US interest payments and entitlements now consume 102% of tax revenue. A permanent oil spike makes this math unsustainable. The US faces a binary choice: let the economy crash into a high-rate recession or print money to cap bond yields, destroying the dollar's purchasing power. Gromen expects the latter. Japan is already signaling the endgame - the Yen is weakening even as yields rise, a pattern typical of emerging markets.
The blockade is fracturing alliances and eroding political support. The USS George H.W. Bush recently detoured around Africa to avoid Houthi missiles, a tactical humiliation. The UK, France, and Japan refused to join the operation. South Korea sent an envoy to Tehran to negotiate safe passage directly. At home, Trump's net approval with non-college white voters has plummeted from +32 to -2 in two months. Gas prices are $4.11 nationally, and the average household will pay $740 more this year, nearly erasing a typical tax refund.
Diplomacy is stalled on a 20-year gap. The US demands a 20-year moratorium on uranium enrichment; Iran offers five years, unchanged from its February position. Senator Lindsey Graham pushes a "zero enrichment" standard, which Saagar Enjeti calls a functional declaration of war. Nikki Haley suggested on CNN that a US special forces mission to extract Iran's enriched uranium is "probably what it's going to come down to."
The Strait of Hormuz will never return to a frictionless waterway. Even if the blockade ends, the discovery that Iran can toll or bottle up the channel has permanently altered the risk calculus. Global energy players are already planning massive overland pipelines to bypass it entirely.
