site banner

Small-Scale Question Sunday for May 3, 2026

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

2
Jump in the discussion.

No email address required.

Is anyone else starting to freak out about the whole Hormuz situation? 13% of the world's oil, 22% of global LNG and a sizeable chunk of fertilizers is blocked. That means 13% fewer big machines running. That is a major decrease in the global economy. Yet markets seem surprisingly stable and people don't seem to be freaking out despite the impending cliff.

Is Trump actually crazy enough to cause a major crash in the global economy or is he willing to admit defeat and pull out? How bad will this crisis actually get?

There is no equilibrium oil price in the current political environment. If the strait stays closed, then the price will go up. But if the price goes up too much, then Trump will chicken out and do whatever needs to be done to open the strait back up. If the strait opens up, then the price of oil will crash. This means that there is almost no upside to speculating that the price will go above ≈ $125/barrel.

Wasn’t physical crude trading at 140$ just couple weeks ago? Not that I would speculate a serious amount of money into this, but Trump so far hasn’t proven entirely able to TACO even though he obviously really wants to. Iran and Israel have a big say in the events to come and both have strong hardliner factions which favour more escalation. It wouldn’t be an entirely unreasonable bet into an escalation spiral.

There were localized spikes to that level, but that’s different from a a global continuous price that high.

There are military options available to force the strait open if it comes to that. They won’t be easy or politically friendly to Trump, but they are possible.

What are these military options in your view? Are you talking about a land invasion?

I just cannot see how, in the case of a US military operation forceful enough to actually stop the blockade or break down the Iranian state, Iranians would not missile spam every single Gulf oil field so it does not even make sense to ship anything through the Strait anymore.