Trump's Biggest Blunder: Oil Prices Return to $100 as Hormuz Crisis Threatens Global Supply

Global oil prices have returned to the threshold of $100 per barrel as instability in the Middle East raises fears of a major disruption to global energy supplies.

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Oil pumps at sunset

The oil market has been extremely volatile in recent days, with futures prices surging by 28 percent, then falling by 30 percent before climbing again by another 10 percent.

Traders reacted to statements by Donald Trump, the president of the United States, about releasing strategic petroleum reserves and his claims that victory over Iran is approaching. However, analysts argue that these measures alone will not stabilize global energy markets.

Strategic Reserves Cannot Fully Replace Lost Supply

According to calculations by Russian economist Pavel Ryabov, published on his Telegram channel, the potential closure of the Strait of Hormuz could remove roughly 20 million barrels per day from the global oil supply.

Several emergency measures could partially offset this loss. Pipelines in Saudi Arabia and the United Arab Emirates could redirect approximately 3 million barrels per day.

Another 1 million barrels per day might come from partially sanction-relieved Russian oil supplies, though this would likely last only one to one and a half months.

Global releases from strategic petroleum reserves could add up to 5.5 million barrels per day, while increased production outside the Middle East could eventually contribute another 1 million barrels per day, though with significant delays.

In total, these stabilization measures would cover only about half of the potential supply shortfall.

Risk of Long-Term Damage to Oil Production

According to Ryabov, the most serious problem may be the forced shutdown of high-output oil wells due to rapidly filling storage facilities.

If the situation in the Strait of Hormuz remains unchanged for two weeks, some of the world's most productive wells may have to be closed.

Restarting such wells can take up to eight weeks, and the process may lead to permanent production losses.

Water migration into oil-bearing layers can reduce reservoir pressure, potentially lowering output by 10 to 30 percent compared to original production levels.

The economist estimates that irreversible losses could reach between 1 and 1.5 million barrels per day, volumes that may never be fully restored.

Similar Risks for Gas Production and LNG Facilities

Comparable technical challenges exist at major natural gas fields.

Sudden shutdowns of high-output wells can trigger hydraulic shocks and abnormal pressure spikes inside reservoirs, potentially causing rock collapse near the wellbore and permanently reducing output.

Liquefied natural gas plants also cannot be restarted quickly. The technological restart cycle can take up to six weeks and may result in additional production losses.

Geopolitical and Economic Consequences

Ryabov argues that the economic consequences of the crisis could have major political implications for the United States.

According to his assessment, rising energy prices could contribute to inflation, a weakening labor market, depletion of military stockpiles and growing political instability.

At the same time, the economist believes the situation may benefit Russia, as higher energy prices could increase budget revenues, potentially ease sanctions pressure and weaken Europe economically.

The analyst also argues that prolonged tensions could deepen divisions within the Western alliance and complicate political initiatives proposed by Donald Trump, including projects known as the Board of Peace and the Shield of the Americas.

According to the economist, several post-Soviet states that have aligned closely with Washington, including Kazakhstan, Uzbekistan, Azerbaijan and Armenia, could also face political and economic consequences if the situation escalates further.

Unresolved Conflict With Iran

On March 11, Donald Trump publicly signaled a desire to step back from the Iranian conflict while declaring that the United States had achieved victory.

However, Tehran has reportedly put forward conditions that remain unacceptable for Washington, including guarantees of non-aggression in the future, the payment of reparations and recognition of Iran's right to maintain a full nuclear fuel cycle.