ANALYSIS: Oil at $114, stock markets in free fall — and Trump promises to step up strikes

A Key Chokepoint for Global Oil

About 20% of the world’s oil passes through the Strait of Hormuz, a 33-kilometer-wide maritime corridor between Iran and Oman. One-fifth of the world’s energy is concentrated in a corridor that any missile, any naval drone, or any act of sabotage could block.

And here’s what sends a chill down analysts’ spines: Donald Trump has provided no details whatsoever on the conditions for a possible reopening of the strait. None. No roadmap. No timeline. No announced negotiations. Just the promise of more violent, longer-lasting, and more intense strikes. As if shutting off the world’s oil supply were merely an acceptable side effect.

Dozens of countries are seeking alternatives

The fact that dozens of nations are actively seeking solutions to restore maritime energy traffic speaks volumes about the gravity of the situation. This is no longer a bilateral tension between Washington and Tehran. It is a global supply crisis whose ramifications affect every continent, every economy, and every household that depends on hydrocarbons for heat, food, or transportation.

Words chosen to leave no room for doubt

Trump didn’t say “if necessary.” He didn’t say “as a last resort.” He said that the United States would continue to strike Iran “extremely hard over the next two to three weeks.” Every word counts. “Would continue”—so the decision has already been made. “Extremely hard”—so the intensity will increase. “Two to three weeks”—so there’s a timeframe, but no end in sight.

And yet, one word is missing from this sentence. A word that markets, diplomats, and strategists are desperately searching for: the word “negotiation.” It is absent. Completely absent. And it is this absence that sent stock markets plummeting and oil prices soaring.

The language of unchecked escalation

When a head of state publicly announces the intensification of military strikes against a sovereign country, without mentioning any conditions for a ceasefire, he sends a crystal-clear message to the markets: prepare for the worst. Financial traders aren’t pacifists out of ideology—they’re pacifists out of self-interest. War is expensive. Uncertainty is even more expensive. And the total absence of any diplomatic prospect is the most expensive of all.

The baseline scenario: already painful

According to Citi’s projections, Brent could average $95 per barrel in the base-case scenario. This is the “optimistic” scenario—one in which the crisis does not escalate further, the Strait of Hormuz remains partially operational, and some form of de-escalation eventually takes hold. And even in this scenario, $95 per barrel remains high enough to fuel global inflation for months.

The worst-case scenario: $130 in the second half of the year

If the situation worsens—with a total blockade of the strait, the destruction of Iranian oil infrastructure, and an Iranian retaliation against Saudi facilities—Citi forecasts Brent crude at $130. One hundred thirty dollars. To put this figure in perspective: during the 2008 oil crisis, the price per barrel reached $147 before triggering a global recession.

We’re not there yet. But the trajectory is clear, and it points in only one direction: upward.

The Continent Most Vulnerable to Oil Shocks

The African Development Bank has described this war as a “serious risk for Africa.” This is not diplomatic rhetoric. It is a barely veiled cry for help. African economies, most of which are net importers of hydrocarbons, have no fiscal buffer to absorb oil prices at $130. Fuel subsidies, already unsustainable in many countries, would simply become impossible.

And while Wall Street analysts calculate their losses in percentages, a bus driver in Abidjan is figuring out whether he can still afford to fill up his tank tomorrow morning. The same crisis, two radically different realities.

Food Prices Already at Record Highs

The FAO has just reported a new peak in global food prices. This is no coincidence. Oil powers tractors, produces fertilizer, and transports crops. When the price per barrel skyrockets, the price of bread follows. And when the price of bread rises in countries where 60% of income is spent on food, it’s no longer about economics—it’s a matter of survival.

A Positive Weekly Close Despite the Chaos

Here’s the most telling anomaly of the day: despite Thursday’s drop, the major indices were still on track for a positive weekly close. The markets are still holding out hope. They hope Trump is bluffing. They hope Iran will back down. They hope that someone, somewhere, will pick up the phone and negotiate.

This hope is based on nothing. No diplomatic signals. No mediation underway. No open channels of communication between Washington and Tehran. The markets are betting on a happy ending for which there is no factual basis.

The “This Can’t Last” Syndrome

Financial market participants suffer from a classic cognitive bias: the normalcy bias. They refuse to believe that the situation could worsen beyond a certain threshold. Because if it does worsen—if the Strait of Hormuz is blocked for weeks, if Iran strikes back at Saudi facilities, if the conflict spreads—then the losses will no longer be measured in percentages. They will be measured in points of global GDP.

Wall Street Is Closed, but the World Keeps Turning

Thursday’s trading session was the last before Wall Street closed for Good Friday. Three days without trading in New York. Three days during which strikes could intensify, the strait could close further, Iran could retaliate—and U.S. markets will be unable to react in real time.

When Wall Street reopens on Monday, the geopolitical situation may have changed fundamentally. And traders know it. It is precisely this uncertainty that amplified Thursday’s panic—a precautionary panic, a panic on the eve of a long weekend, a panic among those who know they won’t be able to sell for three days.

What This Anomaly Reveals

Normally, Brent—the international benchmark—trades above WTI—the U.S. benchmark. This has been the norm for years. Yet on Thursday, WTI traded at a $3 premium over Brent. This reversal is not trivial. It means that U.S. buyers are willing to pay more than the rest of the world to secure their supply.

In other words: the U.S. market anticipates that international supply will contract more than domestic supply. It anticipates that oil from the Middle East will become scarcer, more expensive, and riskier. And this anticipation, coming from the world’s best-informed traders, should be cause for concern for everyone.

The Lack of Any Vision for Ending the Crisis

There is a fundamental difference between using military force as a bargaining chip and using military force as an end in itself. In the former case, each strike brings us closer to an agreement. In the latter, each strike brings us closer to chaos. Trump’s statements on Thursday contained no elements of the former scenario. No conditions. No political objectives. No way out offered to Iran. Just the promise to strike harder and for longer.

The markets aren’t calling for peace out of altruism. They’re calling for predictability. A war with a clear objective and a predictable end—the markets can absorb that. A war without a goal, without limits, and without an end in sight—that’s what causes market crashes.

The Economic Cost of Warmongering Rhetoric

Every presidential statement on Iran has a measurable cost. The 545-point drop in the Dow Jones on Thursday represents hundreds of billions of dollars in market capitalization that has evaporated. The $11 increase in the price of a barrel of WTI crude will translate into additional inflation in the coming weeks. A president’s words come at a price. And it is ordinary citizens who pay that price—at the gas pump, at the supermarket, and on their retirement statements.

An incomparably more dangerous geopolitical context

The last comparable rise in WTI dates back to 2020, when prices rebounded after their historic plunge into negative territory. But the context was radically different. In 2020, the rise stemmed from excessive pessimism that was corrected by the economic recovery. In 2026, the rise stems from a real threat to global supply, against a backdrop of robust demand.

In other words: in 2020, oil prices rose because things were improving. In 2026, they’re rising because things are getting worse. The same price curve, two diametrically opposed stories.

The end of cheap oil may already be behind us

Before this crisis, the market consensus projected oil prices between $70 and $85 per barrel for 2026. That consensus is dead. Buried under the rubble of Thursday’s statements. If the conflict lasts even just the two to three weeks announced by Trump—and there’s no guarantee it won’t last longer—the new floor for oil prices could settle sustainably above $90.

And if the Strait of Hormuz remains disrupted, if Iranian infrastructure is destroyed, if retaliation spreads to neighboring countries, then Citi’s $130 forecast will not be a worst-case scenario. It will be the new normal.

The Illusion of Abundant Energy

For decades, the West has lived under the illusion that oil would always flow, at an affordable price, from regions of the world that could be simultaneously bombed and supplied. That illusion has just crashed against the wall of reality. You can’t wage war on the water tap and then be surprised when the water stops flowing.

Where are the mediators?

Egypt and Russia have called for a negotiated resolution to the crisis. Pope Leo XIV called for peace during his first Easter Mass. But no concrete diplomatic mechanism is in place. No peace conference has been convened. No emissary is on the way. The UN Security Council remains paralyzed by the U.S. veto. The world is watching the conflict unfold as a bystander—and the markets are reflecting this powerlessness in red numbers.

Iran Claims to Have Shot Down a U.S. Aircraft

While analysts scrutinized price charts, Tehran claimed to have shot down a U.S. fighter jet. If this claim is confirmed, it marks an unprecedented escalation in this conflict. If it is denied, it signals that Iran is seeking to demonstrate its capacity to retaliate—including through information warfare. In either case, the message to the markets is the same: this crisis has not yet peaked.

What a Single Day of Trading Teaches Us

Let’s summarize. In a single trading session: oil up 11%. The Dow Jones down 545 points. The Nasdaq down 1.6%. Brent above $107. A WTI-Brent spread reversal not seen in a year. Forecasts ranging from $95 to $130 per barrel. Dozens of countries desperately seeking alternatives to the Strait of Hormuz. And a U.S. president promising to intensify strikes.

These aren’t economic indicators. They’re warning signs.

The question no one is asking

Amid this storm of numbers, one question remains strangely absent from the debate: who is paying the real price of this war? Not Lockheed Martin’s shareholders, whose stock price has soared. Not the Texas oilmen, who are raking in $114 a barrel. Not the strategists in Washington, who watch the explosions on plasma screens.

Those who are paying are the 88 million Iranians living under the bombs. The African families whose food budgets have just skyrocketed. The emerging economies strangled by oil that has become unaffordable. The retirees whose savings are melting away with every trading session. Those who are paying were never consulted. Those who make the decisions will never pay.

Signed, Jacques PJ Provost