Prof G Markets The Iran War’s Oil Shock — How Bad Could It Get?
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Mar 10, 2026 
Jonathan Kanter, former Assistant Attorney General who led antitrust enforcement at the DOJ. He discusses the Live Nation/Ticketmaster settlement and why he views it as a win for Live Nation, raising concerns about lobbying and the lost breakup remedy. Also covered: wild oil price swings after the Strait of Hormuz chaos and how supply routes and infrastructure risks shaped market panic.
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Hormuz Closure Explained
- The Strait of Hormuz closure spiked oil because it handles roughly 30% of traded oil and is the choke point for Iraq, Kuwait, Saudi and UAE exports.
- Traders panicked until analysts accounted for bypass pipelines from Saudi east–west and the UAE north–south that can move millions of barrels daily, calming prices briefly.
Fear Of A Prolonged Supply Crunch
- The market reaction reflected fear of a prolonged supply crunch if the conflict continued and Hormuz stayed closed.
- Despite global oversupply in recent years, removing 20% of supply would constitute a major shock that pushes traders to bid prices up.
Oil Moves To Pump Prices With A Lag
- Higher oil prices transmit to consumer inflation with lags because gasoline is a refined product priced on moving averages.
- A $10 oil increase roughly adds ~25 cents per gallon at the pump, and rising fuel costs raise input prices across the economy.