ARTIFICIAL INTELLIGENCE

“When analysts have looked at the things that could go wrong in global oil markets, [the Strait of Hormuz blockade] is about as wrong as things could go at any single point of failure.” – Kevin Book – Clearview Energy Partners

Kevin Book’s stark assessment captures the gravity of the Strait of Hormuz closure, a chokepoint through which approximately 20% of global crude oil and natural gas flows, now halted by an unprecedented insurance-driven shutdown triggered by the ongoing Iran war.¹ This event, unfolding since early 2026, has plunged world energy markets into turmoil, evoking memories of the 1970s oil embargo and threatening the most severe supply disruption at a single vulnerability point.¹

Who is Kevin Book?

Kevin Book serves as co-founder and managing partner of Clearview Energy Partners, a Washington, D.C.-based research firm specialising in energy markets, commodities, and geopolitical risk analysis.^1,2 With decades of experience, Book is a recognised authority frequently consulted by media outlets including NPR, Fox News, and industry podcasts for his insights on oil price volatility and supply chain disruptions.^1,2,3 His commentary on Fox News and YouTube discussions has highlighted the potential for Iranian retaliation to spike global oil prices through Hormuz interference, positioning him as a leading voice in navigating the intersection of warfare and energy economics.^2,3

Context of the Quote: The Iran War and Hormuz Shutdown

The quote arises from coverage of the Iran war’s escalation, where drone strikes near the Strait of Hormuz prompted insurers to deem the narrow waterway uninsurable, effectively drying up tanker traffic without a formal blockade.¹ Typically, 20 million barrels of oil transit daily, but the closure has forced producers like Iraq to curtail output due to storage constraints, while attacks on infrastructure in Saudi Arabia, Qatar, and the UAE complicate rerouting efforts.¹ President Trump’s response includes U.S. naval escorts and political risk insurance via the Development Finance Corporation (DFC), yet experts doubt its sufficiency given legal limits, finite budgets, and persistent risks to ships and crews.¹

Helima Croft of RBC Capital Markets describes this as the largest energy crisis since the 1970s, driven not by mines or missiles-as in the 1980s Tanker War-but by economical drone tactics that spooked commercial operators.¹ Shipping executives like Stamatis Tsantanis emphasise seafarer safety and environmental hazards in the strait’s S-curve, underscoring why traffic remains stalled despite U.S. interventions.¹

Historical Backstory: The Strait of Hormuz as Global Oil’s Achilles Heel

The Strait of Hormuz, a 33-kilometre-wide passage between Iran and Oman, has long been flagged as the world’s most critical oil chokepoint by bodies like the U.S. Energy Information Administration (EIA). Iran has repeatedly threatened closure during tensions, but the 2026 war marks the first effective halt, amplifying fears realised in war games and risk models.¹

Precedents include the 1980s Iran-Iraq War’s Tanker War, where attacks sank over 500 vessels, prompting U.S. reflagging and escorts of 2,500 tankers. That era saw oil prices double amid uncertainty, though global recessions tempered impacts. Earlier, the 1973 Arab oil embargo quadrupled prices via production cuts, not transit blocks, teaching lessons in strategic reserves now strained by current shortfalls.¹

Leading Theorists and Analysts on Oil Geopolitics

• Helima Croft (RBC Capital Markets): Global head of commodity strategy, Croft pioneered analysis of insurance-driven disruptions, predicting Hormuz risks from asymmetric threats like drones over conventional blockades.¹
• William Henagan (Council on Foreign Relations): Expert on maritime security, Henagan critiques DFC insurance limits in war zones, stressing financial and legal barriers to resuming trade.¹
• Daniel Yergin: Pulitzer-winning author of The Prize and vice chairman at S&P Global, Yergin theorised ‘chokepoint vulnerabilities’ in works like The New Map, forecasting Hormuz as a flashpoint where minimal action yields maximal disruption-a prophecy validated in 2026.¹
• Amy Myers Jaffe: Energy geopolitics professor at NYU, Jaffe’s research on Middle East supply shocks emphasises alternate routes’ inadequacies, aligning with current Gulf infrastructure hits.¹

These theorists collectively warn that Hormuz represents a ‘single point of failure’ in asymmetric warfare, where low-cost Iranian tactics exploit commercial risk aversion, outpacing military countermeasures and reshaping global energy security doctrines.¹