Geopolitics & money, explained calmly
Hormuz in plain English
More oil is getting out of the Gulf than in the summer, but attacks on ships, scarce diesel and LNG, and thin stockpiles are keeping prices high.
The US-Israeli war with Iran began on 28 February 2026. Its biggest economic effect runs through the Strait of Hormuz, the narrow sea passage between Iran and Oman that most Gulf oil and all of Qatar’s LNG exports pass through.
Before the war, about 20 million barrels a day (mb/d) went through it, roughly a fifth of world oil use (US Energy Information Administration, EIA, 2024 data). The International Energy Agency (IEA) counted 10.9 mb/d in September, around half the pre-war level.
Producers also go around it: routes that bypass the Strait, mainly pipelines, carried 5.6 mb/d in September. Counting both, Gulf crude exports were “over 75% of pre-war” (IEA).
But the threat is still there:
Brent crude, the main global oil benchmark, has two prices. The futures price is agreed today for oil delivered later; the spot price is what a physical cargo costs for loading in the coming weeks.
That spot price was $115.22 a barrel on 20 October. December futures settled lower that day, at $108.79 (Dow Jones Market Data; Reuters); near-term cargoes costing more than later ones usually signals scarcity. Futures then rose on 22–23 October, settling at $116.72 on 23 October (Dow Jones).
Prices stay high partly because refined products, fuels such as diesel and jet fuel, are recovering more slowly: Middle East exports were 1.9 mb/d in September against 4.7 mb/d pre-war, says the IEA, which calls diesel markets “under extreme pressure”.
Global oil stocks at end-September were 509 million barrels below end-February levels (IEA), and 4.8 mb/d of production was still shut in (switched off because it can’t be safely produced or shipped) in September (EIA).
Data
Middle East exports of refined fuels (diesel, jet fuel and other products)
How to read this
US Central Command said on 13 October that US forces and partners “clearly control” the Strait; critics cite record ship attacks and high prices. Both use real data, so ask which number: Hormuz, all Gulf exports, or only crude.
Both use real data, so ask which number: Hormuz, all Gulf exports, or only crude.
From this explainerThe New York Times, citing unnamed officials, reports US-Israeli plans for strikes on Iran after the 3 November midterms (via CNBC).
Four Lenses
Views, not facts. Each view is labelled with what it covers; counterpoints come from data or officials.
On 20 October he argued oil markets were rejecting official claims of US control of the Strait and of lower prices after the midterms.
In March he warned of a significant risk that losing control of Hormuz would be for the US what the 1956 Suez crisis was for Britain.
He sees escalation building on several fronts, with danger peaking after Election Day.
He calls the “oil glut” and “Hormuz mostly open” stories an information war; high prices, he says, show real scarcity.
Counterpoint · IEA and Kpler data
The IEA says Gulf crude exports were ‘approaching pre-war levels’ in September, and Kpler put crude through Hormuz at about 80% of pre-war. The IEA says renewed attacks, record freight costs, tight diesel supply and low stocks are keeping the market strained, and Kpler data show Qatar’s LNG exports at under a quarter of pre-war (Reuters columnist Ron Bousso).
Agree / disagree
Your wallet
Context for everyday costs, not a recommendation.
On 19 October, US regular gasoline averaged $4.284 a gallon and diesel $6.276 (EIA).
Diesel fuels trucks and farm machinery. The IEA expects the diesel market to stay tight ‘well into 2027’ unless Middle East fuel exports recover, and says record diesel prices are already raising the cost of goods. That can feed into food prices over time. So far US grocery inflation is modest: US food prices were 2.5% higher in September than a year earlier, and grocery (‘food at home’) prices 1.8% higher (BLS consumer price index, released 14 October).
Oil shocks can feed into wider inflation, and inflation worries can push up the long-term interest rates that mortgages are priced from, though the link is indirect. The average 30-year fixed mortgage rate was 7.32% in the week to 22 October, down from 7.40% the week before but up from 6.19% a year earlier (Freddie Mac).
When prices rise faster than the interest savings earn, cash buys less over time. Consumer prices rose 3.7% in the 12 months to September (BLS), while the FDIC’s national average savings rate was 0.38% (October), an average across all banks.
Reflection Point
In mid-October, US Central Command said US forces and partners ‘clearly control’ the Strait, and the IEA put Gulf crude exports in September, counting bypass routes, at over 75% of pre-war levels. Yet oil prices remain high.
Every fact is dated and linked; views are labelled as views. Read how we work. Spotted an error? Tell us at [email protected].
