By Ricardo Lezama 
Just a few hours ago, the parlaiment of Iran motioned to close the Hormuz Strait. That’s really important to your pocketbook.
Oil prices are poised to surge past $100 per barrel if Iran acts on its threats to block the Strait of Hormuz, a vital maritime corridor for global crude shipments, in retaliation for American military strikes on its nuclear infrastructure, according to expert forecasts.
On Sunday, Iran’s parliament approved a motion to shut the strait, through which approximately 20% of the world’s oil supply transits. The final decision now rests with Iran’s Supreme National Security Council, which has previously stopped short of implementing such a move. Nonetheless, analysts view this as a “worst-case scenario” that could severely disrupt energy markets.
Tensions have already pushed Brent crude up by $10 to above $77 per barrel since Israel’s strikes on Iran began on June 13. Market forecasts suggest further hikes of $4 to $5 per barrel as trading resumes — edging prices past the $80 mark for the first time in months.
Historical Echoes: Price Surges and Economic Fallout
Sir Niall Ferguson warned that markets remain dangerously complacent about Tehran’s capacity to disrupt oil flows, likening the potential economic shock to the seismic crises of the 1970s. He suggested prices could soar “well beyond” $100 per barrel if the strait were closed.
David Fyfe of Argus Media projected even more alarming possibilities, estimating that oil could spike to between $100 and $150 per barrel in such a scenario.
The historical parallels are stark: the 1973 Arab oil embargo and the 1979 Iranian revolution both triggered massive oil price hikes, with broader stagflationary effects—characterized by low growth, high inflation, and rising unemployment.
Stagflation Warning: High Energy Costs, Slow Growth
If the Strait of Hormuz is blocked, the dual shock of reduced oil and LNG exports could mirror those earlier crises, reigniting fears of stagflation — a rare but toxic mix of inflationary pressures coupled with economic stagnation. The situation becomes particularly dangerous given the world’s fragile post-COVID recovery and ongoing geopolitical tensions.
Gas markets are also at risk: the strait is a key conduit for about 20% of global LNG exports, much of which comes from Iran-friendly Qatar. Disruptions here could escalate natural gas prices, especially in Asia and Europe, compounding inflation and straining household and industrial energy costs.
Strategic Balancing and Political Deterrents
While the threat is significant, many analysts still consider full closure unlikely. Tehran’s dependency on Chinese oil revenues and the risk of provoking war with both the U.S. and alienating China — its primary customer — are seen as strong deterrents.
Ole Hansen of Saxo Bank emphasized that even without a full-scale blockade, threats alone could delay shipments and trigger price volatility, making it difficult for central banks to manage inflation expectations.
Oil Above $100 Is Not Just a Market Risk — It’s a Macroeconomic Threat
A disruption in the Strait of Hormuz risks more than just short-term spikes in oil and gas prices. It could push the global economy into stagflation territory, with echoes of the 1970s energy shocks. Inflationary spikes driven by energy costs would complicate monetary policy, possibly forcing central banks to balance between inflation control and avoiding recession.
In short, if oil and gas flows are severely curtailed, the world could find itself once again at the mercy of geopolitical fault lines in the Middle East — with energy sec