Strait of Hormuz Tensions Rise: O’Leary Warns of Economic Shock as Trump Increases Pressure on Iran

Escalating tensions surrounding the Strait of Hormuz are raising concerns about potential disruptions to global oil supplies and a subsequent shock to the world economy. Investor and “Shark Tank” personality Kevin O’Leary warned of these consequences as the Trump administration increases pressure on Iran, including a recent strike on a key Iranian oil facility.

Rising Oil Prices and Geopolitical Risk

Oil prices have seen an increase, briefly climbing above $100 a barrel this week for the first time since 2022, fueled by geopolitical risks in the Middle East and fears of shipping route disruptions as reported by MSN. O’Leary suggests that without current geopolitical tensions, crude oil would likely trade between $55 and $70 per barrel, a price point he believes allows the economy to function effectively.

The Importance of Oil in the Global Economy

O’Leary emphasized the critical role of oil as an input cost for every sector of the economy, stating, “You don’t have an economy without energy.” according to Longbridge. This underscores the potential for widespread economic impact if oil supplies are significantly disrupted.

Trump’s Actions and the Strait of Hormuz

The concerns come as President Trump announced that U.S. Central Command carried out a bombing raid targeting Iran’s primary crude export terminal on Kharg Island as reported by Reuters. This facility handles approximately 90% of Iran’s oil shipments and is located near the Strait of Hormuz. Trump too indicated the possibility of the U.S. Escorting commercial vessels through the strait to ensure safe passage.

The Strait of Hormuz: A Critical Chokepoint

The Strait of Hormuz is considered the world’s most essential oil transit chokepoint, linking the Persian Gulf to the Gulf of Oman and the Arabian Sea. Approximately 20 million barrels of oil passed through the strait each day in 2025, representing nearly one-fifth of global oil and liquefied natural gas flows as detailed by Times Now. The value of this trade is estimated at around $600 billion annually.

Calls for a Security Presence

O’Leary argued for prioritizing the security of the Strait of Hormuz, comparing its importance to the Suez Canal. He suggested that a coalition of countries, particularly oil-producing nations, may need to fund a permanent security presence in the region, even if it costs billions, arguing that this expenditure would be less than the cost of a major disruption.

Market Reaction

As of Friday evening, energy markets showed mixed movement. WTI Crude April 2026 futures climbed 3.74% to $99.31 per barrel, although RBOB Gasoline Futures rose 3.40% to $3.07 per gallon and ULSD Heating Oil Futures advanced 2.34% to $3.99 per gallon. Natural Gas Futures, however, slipped 3.12% to $3.13 per MMBtu.