Bob Elliott
· Nonconsensus
· March 26, 2026 at 10:31
· ⏱ 4 min read
| Read on Substack ↗
Summary
The author analyzes the oil market impact of an ongoing conflict with Iran, now in its fourth week. They argue that temporary supply cushions, like sanctions relief and SPR draws, are masking the full effect of lost production through the Strait of Hormuz, but these are finite and will soon be exhausted, leading to much higher prices.
•A conflict with Iran has disrupted a significant portion of the 20 million barrels per day of oil that previously transited the Strait of Hormuz.
•Temporary measures such as sanctions relief and Strategic Petroleum Reserve (SPR) draws have offset approximately 40% of the lost production.
•The author warns that these supply cushions are not sustainable and will be exhausted in the near future.
•A specific catalyst is mentioned: if the Strait of Hormuz is not reopened by July 4th, the author expects "far higher oil prices."