Monetary Matters with Jack Farley Could the Iran War Cause a New Oil Crisis? | FT's Chief Economics Commentator Martin Wolf
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Mar 13, 2026 
Martin Wolf, FT chief economics commentator known for clear global macro and energy analysis. He examines how a prolonged Iran war could threaten the Strait of Hormuz and spark an oil shock. He outlines scenarios that could push prices sharply higher, assesses strategic ambiguity and US aims, and argues the conflict exposes vulnerabilities in fossil-fuel reliance and reserve policy.
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Strait Of Hormuz Poses Global Shock Risk
- A war involving Iran threatens global energy supply because the country sits along the Strait of Hormuz, which carries about a fifth of world oil and much regional production.
- Martin Wolf notes Iran produces ~4 million barrels/day and the Gulf supplies ~30% of world oil and gas, concentrating nearly half of reserves, making disruption a 'powder magazine' risk.
Short Oil Disruptions Cause Large Price Spikes
- De facto closure of the Straits can quickly spike prices; even temporary closures cause outsized effects because markets trade on margins.
- Wolf cites Capital Economics scenarios where a three-month closure could push oil above $150 and extensive facility damage would cause long-term supply loss.
Strategic Ambiguity Undermines U.S. Credibility
- U.S. policy appears inconsistent and unpredictable under President Trump, creating strategic ambiguity that undermines credibility.
- Wolf argues rapid, shifting statements make it hard for allies and markets to know U.S. aims, reducing the ability to coordinate or rely on U.S. leadership.