What a wild week it has been already. On Sunday night, I watched as the price of oil hit $116 a barrel. It was insane. Financial markets started to panic all over the world because investors know that if the price of oil stays above $100 a barrel for an extended period of time, it will absolutely crush the global economy. Our entire way of life depends upon cheap energy, because virtually every type of human activity in the modern world uses energy. I am using energy as I write this article, and you are using energy as you read this article. After the crazy spike in the price of oil that we witnessed on Sunday night, authorities quickly shifted into damage control mode, and for the moment, they have successfully pushed the price of oil back below 90 dollars a barrel. But how long will they be able to keep it there?

According to CNBC, we are currently experiencing the largest oil supply disruption in the history of the world…

The U.S. war against Iran has triggered the largest oil supply disruption in history, more than double the previous record set during the Middle East crisis of the 1950s, according to an analysis by consulting firm Rapidan Energy.

About 20% of the world’s oil supply has been disrupted for nine days now as tanker traffic through the Strait of Hormuz remains at a standstill. Crude prices have surged above $100 per barrel in response.

The biggest disruption before the current war was during the Suez Crisis of 1956 when Britain, France and Israel invaded Egypt’s Sinai Peninsula, the energy consulting firm told clients in a Sunday note. In that crisis, about 10% of the world’s oil supply at the time was disrupted.

Needless to say, there have been other times when the global supply of oil has been disrupted for one reason or another.

During those times, nations with spare capacity have been able to step up and bridge the gap.

But this time around, the nations that possess most of the spare capacity are being directly affected by this war…

The big difference between the supply shock of the Iran war and past crises is the world has no spare oil capacity to address the problem, the analysts said. Saudi Arabia and the United Arab Emirates hold the overwhelming majority of swing capacity but they have been cut off from the global oil market by the Hormuz closure, the analysts said.

“The conflict has not only taken offline a historically high share of global supply – it has simultaneously disrupted the primary holders of spare capacity,” the Rapidan analysts said. “The result is a market with no meaningful cushion. There is no swing producer positioned to step in.”

It appears that a lot of pain at the pump is ahead for all of us.

Already, the average price of a gallon of gasoline in the state of California has surpassed the five dollar mark…

Prices are currently highest in California, where drivers were paying an average of $5.20 per gallon on Monday morning, and in Washington state, where gas hit $4.63 per gallon.

We haven’t seen anything like this in a long time.

If you can believe it, one gas station in Los Angeles is actually charging more than 8 dollars for a gallon of gasoline…

A lot of people actually thought that the article that I posted yesterday was exaggerating the threat.

I guess not.

The Iranians continue to insist that they will be able to push the price of oil up to $200 a barrel…

“If they can afford the price of oil at $200 per barrel, let them keep playing this game.”

The spokesman for a wing of the IRGC, Ebrahim Zolfighari, says the US has opened a new chapter in the war by bombing Iran’s energy infrastructure.

The good news is that for now western authorities have been able to push the price of oil back below $90 a barrel.

Early on Monday, G7 finance ministers suggested that there could soon be a coordinated release of emergency oil reserves…

The G7 said it was ready to take “necessary measures” to address the economic impact of the US-Israel war on Iran, after a meeting prompted by soaring oil prices, which rose above $100 (£74) a barrel for the first time since 2022.

Following a remote meeting on Monday, G7 finance ministers said they would closely monitor the situation but stopped short of agreeing to release emergency oil reserves.

“We discussed the current conflict in the Middle East, its impact for regional stability, global economic conditions, and financial markets, and the importance of secure trading routes,” they said in a statement.

When that news broke, it immediately ended the panic.

So that was a good thing.

But the truth is that releasing those oil reserves would only be a temporary measure, and it wouldn’t provide that much relief.

Later on Monday, the price of oil really started plummeting once President Trump said that “the war is very complete”…

President Trump told CBS News that he believes the U.S.-Israeli war with Iran is “very far ahead of schedule.”

“I think the war is very complete, pretty much,” he said. “They have no navy, no communications, they’ve got no air force. Their missiles are down to a scatter. Their drones are being blown up all over the place, including their manufacturing of drones. If you look, they have nothing left. There’s nothing left in a military sense.”

Of course, the war is not even close to over, but Trump’s statement was able to push the price of oil way down.

And during that same interview, Trump warned that he was considering taking over the Strait of Hormuz…

Speaking to CBS News Senior White House Correspondent Weijia Jiang on Monday, U.S. President Donald Trump said that he is considering taking further action to secure the Strait of Hormuz, the critical waterway spanning from Iran to Oman through which a fifth of global oil supplies flow annually.

Trump said that while some ships are moving through the Strait despite the Iranian threat, he said that he is “thinking about taking it over.”

It would take boots on the ground to physically secure the Strait of Hormuz, and Trump knows that.

So what are we to make of his contradictory statements?

The Chinese have also been very alarmed by what has been going on in the Strait of Hormuz, because they get a lot of their oil from the Middle East.

Just hours ago, China warned that it “will take necessary measures to safeguard its own energy security”…

“Energy security is of paramount importance to the global economy, and all parties bear responsibility for ensuring stable and uninterrupted energy supplies,” Chinese Foreign Ministry spokesperson Guo Jiakun said Monday when asked whether Beijing would join G7 discussions about a coordinated release of strategic petroleum reserves.

“China will take necessary measures to safeguard its own energy security,” Guo added, referring reporters to the country’s “relevant authorities” for details.

China has repeatedly called for unimpeded...

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