Crude Chaos

Oil Prices Whipsaw on Mixed Messages

US President Donald Trump has extended the deadline for striking Iran's energy plants to April 7. He's pushing Iran to open the Strait of Hormuz, a crucial shipping route, posting on social media that the talks “are going very well.”

Adding to the confusion, Iran denies that any talks have taken place. The White House has not specified whom it is negotiating with. Pakistan has offered to host official peace talks, if the parties are willing.

Crude oil prices are on track for the first weekly decline since the war began, though the swings have been wild, and prices rose again on Friday. Investors are anxious but clinging to hopes of a short war. Brent crude was hovering around $110 per barrel on March 27. Before the war started four weeks ago, crude was trading at around $73 per barrel.

Chokepoint Remains Blocked

This war is the first one to make the key shipping route, the Strait of Hormuz, almost impassable. Most vessels are unwilling even to attempt the perilous journey, as Iran targets them with missiles, drones, sea mines, and armed speedboats.

• The Strait of Hormuz handles about 20% of global oil and liquefied natural gas (LNG) flows
• Many Gulf energy facilities have already been damaged. Some will take years to repair.
• Analysts estimate around 11 million barrels of daily lost supply
• The region is also a key supplier of fertilizers and materials used in chip manufacturing.

The Shock of All Shocks?

The International Energy Agency says this shock is worse than the oil crises of the 1970s combined.

That’s a big claim, as in the 1970s:

• Oil prices rose by around 400%
• Energy shortages triggered high inflation that persisted until the early 1980s.
• Central banks kept rates too low for too long, resulting in painful double-digit interest rates.
• Economies stagnated while prices kept rising, a mix known as stagflation

Economies are less oil‑dependent today, and even the oil markets are more diversified. Fracking has lifted the US to the top spot as the world's biggest oil producer. But the risk remains. Modern economies are interconnected, and supply chains are fragile to disruptions.

How to Cut Energy Consumption

With oil prices surging and supply badly disrupted, the IEA says supply fixes alone aren’t enough. Demand has to adjust, too.

IEA's recommendations:

• Work from home when possible
• Reduce speed limits by at least 10km/hour. This method was widely used in the 1970s.
• Encourage public transport over private car use. Car-pool when you can.
• Limit car access to cities by using number-plate rotation.
• Avoid air travel, particularly business flights.
• Switch to induction from gas hobs.

If the oil shock persists, it may boost investments in green technologies like solar and wind power.

Oil Volatility Spikes

The oil market volatility is at its highest level in nearly four years, since Russia's invasion of Ukraine caused similar panic in the energy markets. 

Tankers are still largely stuck on the other wrong side of the strait. Investors are reacting to headlines: threats, delays, negotiations, reversals. Each new development forces traders to re‑price risk in real time.

They’re trying to gauge the probability when power plants, ports, pipelines, and refineries will be fully operational again. And most importantly: when can ships safely pass through the Strait of Hormuz?