The Strait Is Closed

Since February 28, the Strait of Hormuz has been effectively shut to shipping traffic. Not slowed. Not disrupted. Shut.

According to the U.S. Energy Information Administration's May 12 Short-Term Energy Outlook, nearly 20% of global oil supply flowed through that strait before military action began. That's gone — or close to it.

Brent crude hit $138 per barrel on April 7. The April monthly average was $117/b — $46 higher than February. That's the highest Brent average since June 2022, when Russia's Ukraine invasion was shocking markets.

Where Prices Are Now

As of June 2, Bloomberg's energy market data shows WTI crude trading at $95.68/barrel and Brent at $96.00/barrel. That's a pullback from April's highs, but still deeply elevated by any historical standard.

Why the drop? Ceasefire speculation. According to CNBC reporting from May 29-30, oil prices plunged 20% as traders priced in a potential U.S.-Iran ceasefire breakthrough. Brent posted its biggest monthly loss since 2020 in May.

Then reality hit. On June 1, Iran stopped negotiations and vowed to completely block the Strait of Hormuz, according to Iranian state media reported by CNBC. Trump told CNBC directly: "I don't care" if Iran negotiations are over.

That sent prices jumping again.

What Analysts Are Actually Saying

Goldman Sachs said oil will stay at $90 a barrel into year-end even if Hormuz reopens, according to CNBC's Squawk Box Asia on May 31. The infrastructure damage and trade flow disruption doesn't just vanish when a ceasefire is signed.

RBC's Helima Croft told CNBC the real concern is the U.S. not wrapping up the Iran war by summer. CIBC's Rebecca Babin said to expect higher oil prices if Hormuz flows stay below 50% by end of June. Morgan Stanley's Simonetti told CNBC to assume oil prices and interest rates will remain higher for the duration of the Iran war.

Aberdeen Investments Senior Research Economist Sree Kochugovindan, speaking to Bloomberg on June 2, addressed the 0.72% daily dip to $94.30, noting the complex factors driving investor sentiment in the region. The small daily dip doesn't obscure the broader picture: oil is still near $95+.

The EIA was blunt in its May outlook: implied crude oil volatility has averaged 78% since the conflict began, hitting 106% on March 12. Before the war, it was generally under 30%.

What This Costs Real Americans

CNBC reported on May 29 that the average U.S. household is paying $450 more on gas and energy because of the Iran war.

Gas prices don't hit Wall Street traders. They hit the single mom filling up her tank to get to work. They hit the small business owner running a delivery route. They hit everyone equally and regressively — the less you earn, the bigger the percentage of your income that disappears at the pump.

Mainstream financial coverage has focused heavily on ceasefire speculation and market swings rather than on the direct cost to households.

Canada Is Winning — For Now

High oil prices are minting money for energy producers.

Canada's S&P/TSX Composite Index hit a record close of 35,169.46 on June 2, gaining 1.3% in a single session, according to Bloomberg. Energy and nuclear names led the rally. Celestica Inc., an electronic components manufacturer tied to AI infrastructure, also contributed significantly.

Canadian energy producers are benefiting directly from elevated crude prices. When Brent is near $96, Alberta oil sands operations that are breakeven at $50-60/barrel are printing cash.

What the EIA Isn't Being Fully Credited For

The EIA's May 12 report got almost no mainstream attention proportional to its importance. Their forecasters expected Hormuz flows to "slowly start resuming in late May or early June" — and even with that, they projected it would take until late 2026 or early 2027 for pre-conflict production and trade patterns to normalize.

That projection was made before Iran walked away from negotiations on June 1. The timeline just got longer.

Secondary CNBC reporting noted Secretary of State Marco Rubio confirmed Iran has mined "large segments" of the Hormuz Strait. Mining a waterway isn't undone with a handshake. This is a logistical and military problem that persists after any political agreement.

The War's Energy Costs

The Hormuz closure is the biggest energy supply shock since the 1970s oil embargo — and most Americans don't fully grasp it because the dominant media narrative keeps chasing the ceasefire rumor cycle.

Oil is near $96. Households are out $450. Iran mined the strait. Goldman Sachs thinks prices stay elevated through year-end regardless of what happens next. And the U.S. government has no clear off-ramp.

The $450 per household hits. The volatility isn't going away. Anyone banking on a quick return to $70 oil is likely to be wrong.