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Trying to predict where energy prices are heading is tough enough, but in a time of war it’s even more difficult. Now, add in a war that also involves a massive slowdown in shipping in one of the most important channels in the world. It may not be an impossible task, but it’s darn close.
Even the smartest energy insiders on the planet are now doing a fair bit of guessing. If you tell us when and how the war ends, it might be a little bit easier. But right now it is not embarrassing to admit “we don’t know” because, quite frankly, we don’t.
The U.S. ‘blockade’ of Iranian ports around the Strait of Hormuz (SOH) is under a week old. When the U.S. naval blockade was announced, some worried it would make things worse by further enraging Iran or the rogue Iranian military, who may then attack ship traffic, ports, or people. Thankfully, it’s been relatively calm. However we may be just one drone strike, one stray Iranian missile, or one nasty Hormuz mine blast from an escalation. An assault directly on an American warship would send oil prices soaring. It’s a scary and tentative time.
