Hormuz Closed, Markets on Edge: Iran’s Energy War and the Commodity Fallout
The article below is a summary of a recent, March, 2026 New Yorker Magazine article, as well as Jim Roemer’s personal comments.
Israeli fighter jets crossed the Persian Gulf on March 18 to strike South Pars, the world’s largest natural‑gas field, shared by Iran and Qatar. This was not a routine mission: the goal was to hit Iran where it hurts most—its energy lifeline—and to warn Tehran that as long as it keeps the Strait of Hormuz largely shut, more attacks on oil and gas infrastructure will follow.
While this is old news, the war’s implications are affecting many commodities I follow and other financial markets. From oil and grain markets to the stock market. As of this writing on March 25th, crude oil prices have come off their highs, with some hope that a resolution may be reached soon.
A war that spiraled out of control
The U.S.–Israel campaign began four weeks earlier to topple the Iranian regime, destroying its military and nuclear capabilities, and cutting off its support for regional proxies. After an air strike killed Supreme Leader Ayatollah Ali Khamenei, President Trump demanded Tehran’s “unconditional surrender” and urged the Revolutionary Guard and Iranian citizens to rise up. Instead of collapsing, Iran hit back hard, using drones and missiles to shut down the Strait of Hormuz—the narrow three‑mile‑wide chokepoint that carries about one‑fifth of the world’s oil and gas—inflicting deep economic pain worldwide.
For Iran, now weaker militarily but still capable of disruption, closing the strait has become its main leverage. It signals that any future attack could again paralyze global energy flows, while raising the political price for Trump at home and abroad as voters face high fuel and airline‑ticket costs. Fully reopening the strait, however, may take weeks or months and could require U.S. ground troops and naval convoys to escort tankers, introducing even greater risk and casualties.
This may mean wild financial market volatility. What to do? In my opinion, take a longer-term approach. I believe that things will settle down at some point and markets will stabilize.
Blinking, not backing down
Trump escalated the pressure last Saturday by threatening to “obliterate” Iran’s power plants if the Strait of Hormuz did not fully reopen within 48 hours. Iran responded in kind, warning that it would expand attacks to civilian infrastructure such as desalination plants and IT networks used by Israel, the U.S., and Gulf allies—critical because desalination is the region’s main source of freshwater.
Before the deadline expired, Trump announced that strikes on Iranian power infrastructure were postponed for five days, citing “very good and productive conversations” with Iran. Oil prices dipped, and markets rose briefly, but Iran’s leaders denied any talks, accusing Trump of trying to manipulate financial markets to escape what they see as a U.S.–Israeli quagmire. In effect, Iran has emerged from the South Pars strike stronger at the negotiating table, forcing Trump to back down from the most extreme escalation despite his earlier bravado.
No clean exit, only hard choices
The war has now turned into a contest over whether Trump will send in boots‑on‑the‑ground operations or accept a stalemate that leaves Iran in control of the Strait of Hormuz. Military analysts say attacking Iranian energy infrastructure will not force Tehran to reopen the strait; instead, it could trigger a doomsday scenario of a full closure, higher oil prices, and dangerous retaliation against desalination and IT systems across the Gulf.
If Trump stops now, Iran’s hard‑line regime will survive, its nuclear program will remain intact, and it will feel emboldened to threaten the global economy again in future crises. Gulf allies such as Saudi Arabia and the UAE fear that a weakened but still standing Iran will retain leverage over their economies, while Arab states may begin looking to Russia or China for security, further eroding U.S. influence. As one expert put it, Trump may not have wanted a long war—but after the South Pars strike and his repeated shifts in messaging, that is exactly what he has now.
