The Oil Shock Arrives

Markets are delivering the first verdict on Trump's new war with Iran--and it may be only the beginning.

The earth is beginning to shake. The man in the White House is yelling at it to stop.

As global markets opened early Monday morning, oil futures had surged nearly 20 percent overnight, with Brent crude cresting $111 a barrel and West Texas Intermediate crossing $106—the highest prices for the twin global benchmarks since 2022. That comes on top of last week’s 27-35 percent spike, the largest single-week gain in the history of oil trading.

The Nikkei—Japan’s stock market—plunged more than 6 percent. South Korea’s main stock index plunged so precipitously it triggered an emergency trading halt. As I write this, our own Dow futures had fallen 800 points—hours before American markets even opened.

U.S. gas prices, $3.00 a gallon just days ago, are already approaching $3.50—and climbing.

Thanks, Trump.

When oil stops moving

This is what happens when roughly 20 percent of the world’s oil and natural gas supply suddenly cannot move.

The Strait of Hormuz, that narrow chokepoint between Iran and the Arabian Peninsula, is closed. While that is bad news for the world economy, it hits Asia hardest. More than 80 percent of the oil and liquified natural gas that flowed through that strait last year went east, to Asia—to China, India, South Korea, Japan, and other economies that will now face energy shortfalls of a magnitude not seen since the 1973 Arab oil embargo.

Saudi Arabia is already routing additional shipments through the Red Sea, but those volumes don’t come close to covering the gap. And with Iran naming a hardline successor to the Supreme Leader (his son, for crying out loud)—the tyrants who still control Iran are signaling that they intend to fight, not capitulate.

So there is no obvious end in sight to the war our president launched on his own, without consulting us, and with flagrant disregard to both the spirit and the letter of our Constitution.

It gets worse, friends. Oil facilities take time to repair. Shipping lanes, once they’ve been disrupted, take time to reopen. Even if the guns fell silent tomorrow, energy analysts believe higher prices would persist for weeks, possibly months, as oil merchants deal with a nightmare of compounding problems: damaged infrastructure, shattered logistics chains, and continuing elevated risks to tanker routes.

So the end of this war, whenever it comes, will not bring instant relief.

Only fools didn’t see this coming

In response to these facts, President Trump is offering a typically all-caps, high-decibel demand that you must pretend not to see what is happening in front of you. He posted on social media:

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY! President DJT.”

On cue, Trump’s “amen chorus” chimed in across the nation’s airwaves (thanks to the folks at @BlueATLGeorgia on X for this excellent reel):

OK—let’s sit with this Trumpworld claim for a minute.

American families who drive to work or heat their homes with oil are going to be paying a price that is not small—and they did not choose this path. They had absolutely no say at all in launching this war.

Nobody asked the people—and the people are still supposed to rule in this country.

Then there are the farmers who need fertilizer, much of it derived from natural gas, much of that gas transiting through Hormuz. They will watch their input costs spike, making this year that much tougher in one of the toughest businesses there is, and that will threaten the harvests that feed the world.

Again—no one asked American farmers if they thought our country should launch a massive war against Iran.

There is a global recession on the horizon that no presidential social-media post can tweet away. Presidents don’t have that kind of power. It’s not me saying this. It’s the markets. Go look for yourself.

Was any of this foreseeable? Hell, yes. For decades, anyone who knew a damn thing about the Middle East has been warning that military confrontation with Iran carries precisely this risk. The Council on Foreign Relations, the Energy Information Administration, every serious Middle East analyst, every business leader who traveled to the region, every reporter who covered it—knew.

The Strait of Hormuz is not a secret.

The deeper costs of war

But there is a cost beyond oil futures and GDP projections, and it is the one that may be doing the most damage to our country.

While Iranian mothers and fathers buried their children this week—including the schoolgirls of Minab, killed when they showed up for class—the official White House social media account posted a spliced video of action movie explosions alongside actual footage of strikes that were killing people—and they captioned it: “JUSTICE THE AMERICAN WAY.”

When asked about the dead children, the Secretary of Defense merely shrugged. When critics objected, they were told they lacked resolve. Or patriotism. Or a sense of humor. Or something.

There is a power in each one of us that is greater than anything found in the White House. It’s our compass, our true north, the basic sense of decency and morality that the vast majority of people on this planet share.

Cardinal Blase Cupich of Chicago said what needed saying, in a strong rebuke to Trump’s war-making and the glee his minions take in it: “A real war with real death and real suffering being treated like it’s a video game—it’s sickening.”

He’s right. And not just about the White House’s grotesque content strategy. Cupich is describing something important about this moment in our history: What this war of Donald Trump’s is asking of us.

All wars ask the same thing: Look away; smother your hearts; decline to protest; scroll past the memes; accept, without pausing to think about it, the framing that dead Iranian schoolchildren are simply the necessary backdrop to our national triumph and the fodder for a stupid social-media giggle.

Empires have always found ways to make their wars entertaining. War is the health of the state.

Oil prices will eventually come down. Markets will find their level. But conscience, once broken to this wickedness, does not repair so quickly.

Cardinal Cupich is right about one more thing: The longer we remain blind to the real costs of war, the more we risk the most precious thing we have. Not our portfolios. Our humanity.

—Terry