Crude Oil Tops $90 — Strait of
WTI futures have reached the $90 level for the first time in 2 years and 5 months. This is not merely a price fluctuation, but the manifestation of a structural risk where the prolonged US-Iran conflict and the Strait of Hormuz, the world's largest energy bottleneck, have simultaneously become apparent, impacting global inflation, monetary policy, and geopolitics.
── Understand in 3 points ─────────
- • WTI crude oil futures briefly reached the $90 per barrel level. This is the highest level in approximately 2 years and 5 months since October 2023.
- • Concerns that the exchange of attacks between the United States and Iran will prolong are dominating the market.
- • A Qatari minister stated that the Strait of Hormuz could remain impassable for tankers and other vessels.
── NOW PATTERN ─────────
The US-Iran conflict is structured such that military escalation progresses irreversibly through a "spiral of conflict," and a "chain of contagion" spreads across all domains—energy, finance, and food—via the Strait of Hormuz, a critical choke point for the global economy. Both countries are trapped in "path dependency," making domestic political compromise difficult, with no end in sight.
── Probability and Response ──────
🟡 Base 50% — Trends in tanker insurance rates in the Strait of Hormuz, frequency and scale of military actions by both the US and Iran, implementation status of OPEC+ production increases, FRB statements regarding energy prices.
🟢 Optimistic 20% — Reports of mediation by Oman and Qatar, softening of rhetoric from both the US and Iran, attendance of Iran's foreign minister at international conferences, Trump's remarks hinting at a "deal."
🔴 Pessimistic 30% — US military attack on Iranian mainland, Iranian missile attack on US military bases, discovery of mines in the Strait of Hormuz, suspension of tanker insurance underwriting, activation of emergency reserve release by the IEA.
📡 Signal — What Happened
Why it matters: WTI futures have reached the $90 level for the first time in 2 years and 5 months. This is not merely a price fluctuation, but the manifestation of a structural risk where the prolonged US-Iran conflict and the Strait of Hormuz, the world's largest energy bottleneck, have simultaneously become apparent, impacting global inflation, monetary policy, and geopolitics.
- Market — WTI crude oil futures briefly reached the $90 per barrel level. This is the highest level in approximately 2 years and 5 months since October 2023.
- Geopolitics — Concerns that the exchange of attacks between the United States and Iran will prolong are dominating the market.
- Maritime Traffic — A Qatari minister stated that the Strait of Hormuz could remain impassable for tankers and other vessels.
- Price Forecast — The Qatari minister stated that crude oil prices could surge in the next 2-3 weeks.
- Politics — President Trump claimed on social media that "any deal with Iran is impossible except for unconditional surrender."
- Supply Risk — The Strait of Hormuz is the most critical choke point, through which approximately 20-21% (about 21 million barrels per day) of the world's seaborne crude oil passes.
- Sanctions — The US is re-strengthening its "maximum pressure" sanctions policy against Iran, aiming to effectively reduce Iran's crude oil exports to zero.
- Military — The US military has deployed additional carrier strike groups to the Middle East and continues airstrikes on Houthi-related targets in Yemen.
- OPEC — OPEC+ has announced a gradual production increase plan starting April 2026, but geopolitical risks are offsetting the effects of the increase.
- Economic Impact — Crude oil prices above $90 will push US retail gasoline prices above $4 per gallon, adding upward pressure to the Consumer Price Index (CPI).
- Monetary Policy — The FRB maintains its path of interest rate cuts for 2026, but soaring energy prices pose a risk of slowing the pace of cuts.
- Japanese Economy — Japan relies on the Middle East for approximately 90% of its crude oil imports, and a blockade of the Strait of Hormuz would inflict devastating damage on the Japanese economy.
To understand this WTI futures break above $90, it is necessary to trace the timeline of the US-Iran conflict from Trump's first term in 2018.
In May 2018, President Trump (first term) declared withdrawal from the Iran nuclear deal (JCPOA) signed by the Obama administration and imposed "maximum pressure" sanctions. Iran's crude oil exports plummeted from 2.5 million barrels per day to effectively less than 500,000 barrels, severely damaging the Iranian economy. In response, Iran gradually resumed uranium enrichment from 2019, and in June of the same year, a tanker attack incident occurred in the Strait of Hormuz. In September, Saudi Arabia's Abqaiq oil facility was attacked by drones, leading to a shocking situation where approximately 5% of global crude oil supply was temporarily halted.
The Biden administration (2021-2025) sought a dialogue with Iran, but the reconstruction of the nuclear deal did not materialize. During this period, Iran accelerated its nuclear development, raising uranium enrichment levels to nearly weapons-grade 60%. Iran also expanded its influence throughout the Middle East through a proxy network known as the "Axis of Resistance," including Hezbollah in Lebanon, the Houthis in Yemen, and Shiite militia groups in Iraq.
When President Trump was re-inaugurated in January 2025, US-Iran relations rapidly deteriorated again. The Trump administration immediately re-strengthened sanctions on Iran, making clear its policy to reduce Iran's crude oil exports to "zero." From the latter half of 2025, Houthi attacks on tankers in the Red Sea intensified, and the US military began large-scale airstrikes on Yemen. This escalated into an indirect military conflict with Iran.
Entering 2026, the situation escalated to a new phase. Direct attacks by the US military on Iran-related facilities and retaliatory actions by Iran became a repeated exchange. Crucially, the Strait of Hormuz presents a geographical bottleneck. This strait, merely 33 km wide, sees approximately 20% of the world's seaborne crude oil and 25% of LNG shipments pass through it. Iran controls the northern shore of this strait and theoretically possesses the capability to blockade it through mine-laying or missile deployment.
The Qatari minister's statement about "tankers being unable to pass" indicates that this blockade scenario is no longer mere theory but is beginning to be recognized as a real risk. Qatar itself is the world's largest LNG exporter, located at the exit of the Strait of Hormuz, making the weight of this statement extremely significant.
President Trump's "unconditional surrender" statement significantly narrows the scope for diplomatic resolution. Historically, the term "unconditional surrender" has been used since the Casablanca Conference (1943) during World War II, signifying an ultimate hardline stance that leaves no room for negotiation for the opposing party. Issuing such a demand to a sovereign nation like Iran, a regional power with a population of 88 million and nuclear development capabilities, is tantamount to effectively closing the path to diplomatic resolution.
Understanding this structure suggests that $90 crude oil may be just the "beginning." During the 1979 Iranian Revolution, crude oil prices surged approximately threefold, and in the 1990 Gulf Crisis, they more than doubled. If an actual blockade of the Strait of Hormuz occurs (even partially), levels of $100, $120, or even higher are not historically uncommon. The question is whether "$90 is the peak, or merely the entrance."
The delta: The crude oil market reaching the $90 level is a signal that the market has begun to price in a qualitative shift in the US-Iran conflict from a phase of "sanctions and negotiations" to one of "military exchanges and maritime blockade risk." The simultaneous statements by the Qatari minister regarding a Hormuz Strait blockade and Trump's "unconditional surrender" remark have rapidly narrowed the scope for diplomatic resolution, structurally elevating the risk premium in the energy market.
🔍 Reading Between the Lines — What the News Isn't Saying
The Qatari minister's statement about the "Strait of Hormuz being impassable" is not merely a market comment. Qatar is the world's largest LNG exporter, with its exports 100% dependent on the Strait of Hormuz. Therefore, the deliberate public announcement of a risk that would directly hit its own economy strongly suggests that Qatar has actually received threatening messages from Iran behind the scenes. Furthermore, the essence of Trump's "unconditional surrender" statement may be a strategic move to intentionally crush diplomatic solutions, thereby paving the way for military options—particularly an Israeli attack on Iranian nuclear facilities. What the market is most overlooking is the fact that the US Strategic Petroleum Reserve (SPR) has decreased by approximately 43% from its 2020 peak, leaving a historically thin buffer against price surges.
NOW PATTERN
Spiral of Conflict × Chain of Contagion × Path Dependency
The US-Iran conflict is structured such that military escalation progresses irreversibly through a "spiral of conflict," and a "chain of contagion" spreads across all domains—energy, finance, and food—via the Strait of Hormuz, a critical choke point for the global economy. Both countries are trapped in "path dependency," making domestic political compromise difficult, with no end in sight.
Intersection of Dynamics
The three dynamics—spiral of conflict, chain of contagion, and path dependency—are not operating independently but are forming a "vicious triangle" that mutually reinforces each other.
The "spiral of conflict" gradually escalates military tensions between the US and Iran, increasing the risk of a Hormuz Strait blockade. This risk, through the "chain of contagion," spreads to crude oil prices → inflation → financial markets → and the global economy as a whole. As the impact on the global economy grows, nations pressure either the US or Iran, but due to "path dependency," compromise is structurally difficult for both countries, rendering the pressure ineffective. As time passes without a diplomatic solution, the "spiral of conflict" turns another notch, further increasing the risk—this loop continues to spin.
Particularly dangerous is the addition of "time" as a factor to this triangle. The longer the conflict persists, the further Iran's nuclear development advances, and the US military options converge towards the even more destructive direction of "preemptive strikes on nuclear facilities." Simultaneously, the energy market begins to consistently price in a "risk premium," and $90 could become the "new floor."
This structure is similar to the oil crises of the 1970s, but a critical difference is that back then, the Soviet Union could play a certain mediating role within the Cold War structure, whereas now, both China and Russia are acting based on their own interests, and a true mediator is absent. The UN Security Council is also dysfunctional due to the veto power of the US, China, and Russia. A state close to "coordination failure" is occurring at the international community level, creating a situation where there are no brakes to stop the mutual reinforcement of the three dynamics.
📚 History of Patterns
1973: First Oil Crisis (OPEC Arab Oil Embargo)
Geopolitical conflict in the Middle East weaponized crude oil supply, inflicting devastating damage on the global economy. Crude oil prices surged approximately fourfold ($3 → $12), and developed nations fell into severe stagflation.
Structural Similarity to Today: Single-region dependence for energy supply directly converts geopolitical risk into economic risk. Although the embargo was lifted in a few months, its economic impact lasted for several years. The economic impact of a supply shock persists far longer than the duration of the shock itself.
1979-80: Second Oil Crisis (Iranian Revolution → Iran-Iraq War)
The halt in production due to the Iranian Revolution and the outbreak of the Iran-Iraq War caused crude oil prices to surge approximately threefold from $13 to over $40. A "Tanker War" (mutual attacks on oil tankers) occurred in the Strait of Hormuz.
Structural Similarity to Today: Political upheaval in Iran invariably hits the crude oil market directly. Tanker attacks in the Strait of Hormuz have a real precedent from the 1980s and are not mere theoretical speculation. Approximately 540 tankers were attacked during the Iran-Iraq War alone.
1990: Gulf Crisis (Iraq's Invasion of Kuwait)
Iraq's invasion of Kuwait caused crude oil prices to double from approximately $21 to over $40. Crude oil supplies from Kuwait and Iraq were disrupted, and the global economy entered a recession.
Structural Similarity to Today: Military conflicts in the Middle East trigger an immediate reaction in the crude oil market. Prices surge due to a "fear premium" even before actual supply disruptions occur. The market moves on risk perception rather than reality.
2019: Saudi Arabia Abqaiq Oil Facility Attack
A drone attack by Houthi rebels (Iran-backed) damaged the world's largest oil processing facility, temporarily halting approximately 50% of Saudi crude oil production (5.7 million barrels per day). Crude oil prices surged by about 15% on the next trading day.
Structural Similarity to Today: Iran's proxies possess the capability to directly attack energy infrastructure in the Middle East. Advances in drone and missile technology have brought to light the risk of "asymmetric attacks" that conventional air defense systems cannot fully counter.
2023-24: Red Sea Houthi Tanker Attacks
Triggered by the Gaza conflict, Houthi rebels began attacking tankers in the Red Sea. Maritime trade via the Suez Canal was forced to reroute significantly, causing shipping costs to surge severalfold.
Structural Similarity to Today: Middle Eastern choke points (Strait of Hormuz, Suez Canal, Bab el-Mandeb Strait) are not independent risks but are interconnected. If one choke point is blocked, the burden concentrates on alternative routes, increasing overall costs.
Patterns Revealed by History
The lessons from historical patterns over the past 50 years are clear. Every time geopolitical conflict in the Middle East has impacted energy supply, crude oil prices have moved in "doubling" as a basic unit. In 1973, it was fourfold; in 1979, threefold; in 1990, twofold; and in 2019, a temporary but sharp 15% surge was recorded.
There are three important common patterns. First, a "fear premium" moves the market before actual supply disruptions. Investors price in the worst-case scenario, so even if the Strait of Hormuz is not actually blocked, prices rise merely due to an increase in that risk. The current $90 level is precisely at this stage.
Second, the economic impact of price shocks is asymmetrically prolonged. The 1973 embargo ended in a few months, but stagflation lasted for several years. Even if crude oil prices fall, gasoline and food prices, once elevated, do not immediately decrease (the so-called "rocket and feather" phenomenon).
Third, while a complete, long-term blockade of the Strait of Hormuz has not occurred historically, "partial disruptions" have happened repeatedly. Examples include the Tanker War in the 1980s, tanker seizures in 2019, and Red Sea attacks in 2024. Even without a full blockade, the "normalization of disruptions" alone is sufficient to push up crude oil prices and damage the global economy. The current phase is most likely heading towards this "normalization of partial disruptions."
🔮 Next Scenarios
Military exchanges between the US and Iran continue, but do not escalate to a full blockade of the Strait of Hormuz. Both sides implicitly recognize red lines, and "managed escalation" persists for several months.
Specifically, sporadic harassment of tankers by Houthi rebels and Iran-linked militias (tracking, warning shots, minor disruptions) continues, making passage through the Strait of Hormuz possible but "risky." War Risk Premiums surge significantly, and tanker freight rates become 2-3 times higher than usual. The US military strengthens escort missions in the Strait but avoids direct large-scale conflict with Iran.
In this scenario, WTI crude oil prices fluctuate in the $85-$100 range. The $90 level becomes the "new normal," and the market prices in a constant risk premium. OPEC+'s gradual production increase partially mitigates price hikes but cannot fully offset the geopolitical risk premium.
The impact on the global economy remains at a "damaged but controllable" level. The FRB's pace of interest rate cuts slows, but the cuts themselves do not stop. In Japan, electricity and gas prices continue to rise, increasing the burden on households, but government subsidy policies mitigate this to some extent. This "unresolved stalemate" is the most probable outcome because both sides recognize the costs of an all-out war.
Implications for Investment/Action: Trends in tanker insurance rates in the Strait of Hormuz, frequency and scale of military actions by both the US and Iran, implementation status of OPEC+ production increases, FRB statements regarding energy prices.
A diplomatic breakthrough occurs, significantly easing tensions between the US and Iran. The most likely scenario is the initiation of negotiations through "informal channels" mediated by Gulf states such as Oman and Qatar.
President Trump's "unconditional surrender" statement is an official diplomatic position, but there is a non-zero possibility that conditional negotiations could take place through back channels. Trump has a precedent from his first term, where he threatened North Korea with "fire and fury" before achieving a summit meeting. A similar pattern of "maximum pressure → dramatic negotiation shift" could occur with Iran.
If some interim agreement (a package of temporary nuclear development freeze and partial sanctions relief) is reached, the risk premium in the crude oil market would rapidly dissipate, and WTI could return to the $70-$80 range. If the transit risk in the Strait of Hormuz decreases, tanker freight rates would also normalize, and overall energy costs would decline.
However, the probability of this scenario is low because hardliners within Iran (especially the Revolutionary Guard Corps) have the ability to obstruct negotiations, Iran hardliners within the Trump administration (some neoconservative cabinet members) may oppose a diplomatic solution, and Israel would strongly oppose any agreement with Iran. With numerous spoilers present, the window for diplomacy is extremely narrow.
Implications for Investment/Action: Reports of mediation by Oman and Qatar, softening of rhetoric from both the US and Iran, attendance of Iran's foreign minister at international conferences, Trump's remarks hinting at a "deal."
Military escalation becomes uncontrollable, making passage through the Strait of Hormuz virtually impossible. The most dangerous triggers are a direct US military attack on Iranian mainland military facilities (nuclear sites or Revolutionary Guard Corps bases), or a large-scale Iranian missile attack on US naval vessels or bases.
If Iran decides to blockade the Strait of Hormuz, its methods would involve a combination of mine-laying, deployment of anti-ship missiles, and harassment by fast attack craft. Even if a complete physical blockade is difficult, it is possible to create a state where "safe passage is impossible," and if insurance companies refuse to underwrite war risk insurance for tankers, the effect would be virtually the same as a blockade.
If this scenario materializes, crude oil prices could surge to $120-$150, or even over $200 in the worst case. Global GDP is estimated to suffer a negative impact of 1-2%, and countries highly dependent on the Middle East, such as Japan, South Korea, and India, would face a severe energy crisis. In Japan's case, while oil reserves are sufficient for about 200 days, LNG reserves are only for about 2-3 weeks, leading to a more severe impact on electricity supply.
In financial markets, risk-off movements would accelerate, and stock markets could experience a 10-20% correction. The FRB would halt interest rate cuts, and the risk of stagflation (recession + inflation) would become a reality. This scenario's probability is estimated at a higher 30% because the dynamics of the "spiral of conflict" are already deeply in motion, and the possibility of accidental clashes (mis-fire, misidentification) triggering escalation cannot be ignored.
Implications for Investment/Action: US military attack on Iranian mainland, Iranian missile attack on US military bases, discovery of mines in the Strait of Hormuz, suspension of tanker insurance underwriting, activation of emergency reserve release by the IEA.
Key Triggers to Watch
- Occurrence of tanker attacks/seizures in the Strait of Hormuz: Within the next 1-4 weeks (corresponding to the Qatari minister's 2-3 week warning)
- Implementation status of OPEC+'s April 2026 production increase plan (whether production actually increases or is postponed): Late March to early April 2026
- FRB (Federal Reserve Board) FOMC meeting interest rate decision and mention of energy prices: March 18-19, 2026 (next FOMC)
- New IAEA report on Iran's nuclear development: March-April 2026 (report aligned with the next Board of Governors meeting)
- Announcement of additional sanctions or military action against Iran by the Trump administration: Within the next 2-6 weeks (follow-up to "unconditional surrender" statement)
🔄 Tracking Loop
Next Trigger: OPEC+ April 2026 Production Increase Meeting (final decision late March) — Whether production proceeds as scheduled or is postponed due to geopolitical risks is the most critical event determining if $90 is a ceiling or a floor.
Continuation of this pattern: Tracking Theme: US-Iran Conflict and Hormuz Strait Energy Crisis — Next milestones are OPEC+ production increase decision (late March 2026) and FOMC interest rate decision (March 19, 2026).
🎯 Oracle Declaration
Prediction Question: Will WTI crude oil futures prices exceed $100 per barrel by April 30, 2026?
Decision Deadline: 2026-04-30 | Decision Criteria: YES if the closing price of WTI crude oil futures (NYMEX, nearest month contract) records $100.00 per barrel or more on any single day. NO if it does not reach $100 even once by April 30.
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