Oil prices remain high despite Donald Trump announcing a plan (“Project Freedom”) to help vessels pass through the Strait of Hormuz. Markets are skeptical the plan will quickly resolve what the International Energy Agency calls the largest energy disruption in history.
The conflict and Iran’s restrictions have drastically reduced shipping traffic, cutting a significant share of global oil supply. While the U.S. plans to support transit with military resources, Iran has warned against interference, raising risks of further escalation.
As a result:
-
- Global oil supply has dropped sharply (about 14.5 million barrels per day).
-
- Prices have surged nearly 50% and remain above $100 per barrel.
-
- Oil flows through the strait are far below normal levels.
Analysts believe reopening the strait and restoring supply will take months due to damaged infrastructure, security risks, and logistical backlogs. Overall, markets may be underestimating how long disruptions—and high prices—will persist.