Patrick Boyle put out a piece a couple days ago basically saying the same.
However it’s worth noting that pretty much all his clips are negative, warning of issues lurking in the financial world (usually outside of the media’s purview).
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Paul Krugman :
So far, despite much higher oil prices, demand for oil has fallen by only a fraction of the loss of supply. Instead, the world economy is running by taking oil out of storage. Since there’s only so much oil in the tanks, this can’t go on. So if the Strait doesn’t reopen, prices will have to soar high enough — and inflict sufficient economic damage — to destroy another 11 or more million barrels a day of demand. That’s a lot.
Thinking about this very precise question after all the news of drones and missiles hitting oil infrastructure.
If the Strait of Hormuz was magically reopened tomorrow, how quickly could Gulf oil production come back online? Pretty quickly, according to Goldman Sachs. But the longer it stays shut the more severe the problems.
The short answer is that oil production and shipping can be recovered rather quickly because the damage to infrastructure has been limited.
In contrast LNG infrastructure is fu…significantly damaged. No quick recovery can be expected. Whatever happens in the Strait of Hormuz, it’s probable that next winter will be an interesting one.
JPMorgan earlier this month warned that Qatar’s massive Ras Laffan complex “may require years of repair” to bring back the estimated 17 per cent loss to output from strikes. Losing less than a fifth of LNG production might not sound disastrous, but Ras Laffan is the biggest LNG export facility in the world, and in a tight energy market this will be painful.
The long answer and the link to Goldman Sachs report at FT Alphaville (free but login).
It’s assumed that Iran has maybe three weeks storage capacity left before shut-ins would have to start, with fuel shortages etc also coming - thought it might be a few more months before actual financial consequences would show.
Clearly, it’s not a situation Iran was accounting much for.
Once the regime can’t pay its militias anymore, all bets are off.
It will be awfully close to the Mid-terms in any case.
Closed production is the most worrying thing as it represents potential permanent loss in production even after the war is over. It’s not clear to me when (or if already) we hit this stage for some of the GCC countries.
Thing is you simply cant just pull the plug on a refinery.
The moment you shut it down the oil will coagulate, ruin all the filters and all the seals.
A refinery that is switched off is a dead refinery and the cheapest solution is to simply pour the refined oil into the sea or in a depression on the ground.
Wasn’t it Azerbaijan who did this some years back when oil was so cheap and they could not sell it?
The Saudis did it too, athough it was called “stabilize the dunes” but in reality they had to get rid of overproduction.
As you say, it is not good to stop a refinery and so refineries are running at reduced capacity to extend inventory they have (they can only reduce so much). This is leading to reduced output and higher costs.
I guess some might try to time their usual maintenance to take offline when they run out of crude.
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Well, it looks like iran is loading up old tankers with oil and anchoring off it’s coast (for now). it’s resourceful in a way, i guess … delays capping the well itself. better situation than the UAE states.
And DJT is now threatening to sanction non-US organizations that pay iranian toll through SoH
(email walled, used your on-line shopping email or similar?) Iran’s Leaders Turn to Old Supertanker to Survive US Blockade - Newsweek
I can foresee 20 old supertankers amassing just on their side of the demarcation line, filled to the brim with crude. Crewed by Islamic Guards. Simultaneously all 20 sail for China.
What’s the US going to do? Try and sink one or more? Ecological disaster. Try and board them? With Islamic Guards on board US Servicemen will take casualties.
This will be messy.
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Seems to me that some have a green light when it comes to navigation?
And where better to go than a fantasy island Superjacht Nord taucht vor den Seychellen auf - 20 Minuten
I saw a new acronym today: “NACHO” “Not A Chance Hormuz Opens”
Courtesy of Paul Krugman.
On X they were having fun coming up with new ones:
| Acronym | Full Phrase Expansion |
|---|---|
| TACO | Trump Always Closes Opening |
| NACHO | Not Actually Changing Hormuz Opening |
| CHURRO | Closing Hormuz Unless Reparations R Offered |
| ENCHILADA | Even Now, The Crisis In Hormuz Is Lost Amongst Dialogue About a Ballroom |
| WASABI | We’re All Stuck And Brent Is high |
| PITA | Permanent Insider Trading Advantage |
| TOFU | Trump Only Fucks Up |
| TAMALE | Trump Absolutely Makes America Look Evil |
| FAJITAS | Failure At Jostling Iran Towards A Settlement |
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According to the BBC Iranian Media is reporting that two missiles have been targeted at a US Frigate trying to enter the straight. The warship has apparently turned back.
FAJITAS
Situation not improving, update via Reuters. It’s starting to look that even if the sea is open to traffic, there will no be oil & gas to transport.
May 4 (Reuters) - Authorities in the United Arab Emirates’ Fujairah said on Monday that a fire broke out at the Fujairah Oil Industry Zone following what they described as a drone attack originating from Iran.
Warnings that we will have a fuel shortage:
While the Swiss may be willing to pay more, the question is will countries block exports to ensure their own supply? It mentions that gas storage for Switzerland is stored in neighbouring countries and there’s only a single domestic refinery which covers just 20% of needs.
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At least one nation has managed to get away from its oil dependency
https://www.nytimes.com/2026/05/05/business/china-wind-turbines.html
A devoted effort could let Switzerland claim that as well. Solar Panels on all new buildings, reasonable incentives to install panels on existing buildings (require utilities to buy electricity at 80% of their retail rated). Wind farms are tougher but nimby rules could be relaxed.
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Just removing a lot of regulations would help. Let people attach to facades etc. not just roof. Encourage small scale balcony solar which doesn’t require expensive contractors to do.
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