Here's a scary thought: the world's most important oil chokepoint is basically empty. Before the recent hostilities, about 60 oil tankers would sail through the Strait of Hormuz every day. Now? The number is hovering near zero. That's the stark reality flagged by Robin Brooks, a Senior Fellow at The Brookings Institution, in a recent analysis.
"Twenty million barrels of oil transit the Straits of Hormuz every day," Brooks wrote. For perspective, that's almost three times Russia's daily exports. The market is already feeling the pinch. The United States Oil Fund LP (USO) surged 9.98% to $105.92 on Friday, and the United States Brent Oil Fund LP (BNO) jumped 8.08%. Brent crude hit around $90 a barrel—its highest since April 2024.
Iran's Survival Playbook: Target Oil
So, what's Iran's game? Brooks argues the calculus is brutally simple. The regime can't match U.S. and Israeli military power head-on, so it's going for the economic jugular. "The Iranian regime is battling for its survival," he wrote. "Its only play is to spike oil prices as much as possible." This comes as the Israel Defense Forces reportedly destroyed an underground bunker beneath Ali Khamenei's leadership compound in Tehran.
Brooks notes that promises of U.S. naval escorts don't solve the core problem. Iran can still target pipelines, ports, and other critical oil infrastructure far beyond the strait itself.
The One-Drone Doomsday Scenario
This is where the math gets terrifying. Protecting 60 tankers moving in both directions every single day is a logistical nightmare bordering on impossibility. "All Iran needs to do is to sneak through a couple of drones to blow up one ship," Brooks wrote, "and we're going from what is currently a very serious incident to a massive oil shock."
It's not an abstract fear. Qatar's Energy Minister Saad al-Kaabi told the Financial Times that Gulf exporters would halt production within days if tankers can't pass. The supply chain is that fragile.
Prices Are Up, But the Upside Risk Remains
The warning comes as oil is already on a tear. Brent crude is up more than 18% since the end of last week, per Brooks. WTI crude futures climbed more than 8% to $88 a barrel on Friday—on track for their biggest weekly jump since 2022.
Brooks compares the current situation directly to Russia's invasion of Ukraine in 2022, but says this one has the potential to be far larger in scale. And if an actual tanker attack occurs, the consequences would ripple far beyond the energy markets.
"Oil prices would spike, the Dollar would rise sharply, emerging market central banks would be selling Treasuries," he wrote. That kind of pressure could destabilize complex U.S. Treasury basis and swap spread trades. "The US and global markets are very vulnerable," he added.
In other words, the Strait of Hormuz isn't just a shipping lane; it's a tripwire for the entire global financial system. And right now, the traffic has stopped.
