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Tankers in the Strait of Hormuz have ground to a halt, cutting off<\/a> much of the world from vital oil supplies due to the United States\u2019 war on Iran.<\/p>\n Dwindling supplies and cut output by oil producers are sending rippling effects across global markets. As S&P Global vice chair Daniel Yergin argued in a Financial Times essay<\/a>, it\u2019s looking like a \u201cnightmare scenario\u201d is now unfolding as skyrocketing oil prices \u201csend the world economy plummeting into a deep recession\u201d \u2014 a reckoning that\u2019s been decades in the making.<\/p>\n The Strait of Hormuz has turned into a major chokepoint, with around 20 percent of the world\u2019s liquefied natural gas and oil supply typically traveling through its waters.<\/p>\n Now that tankers aren\u2019t taking the risk of being targeted by Iranian drones or weaponized speedboats, that crucial artery has been largely cut off. While Yergin argues Asia could be hit hardest sooner, global oil and gas markets across the world will be \u201cgrappling with the crisis.\u201d<\/p>\n The price of crude oil soared past $100 a barrel<\/a> over the weekend as production slowed significantly. Americans are already feeling the effects at the gas pump<\/a>, with prices surging for both gasoline and diesel<\/a>.<\/p>\n On Wall Street, grim effects are playing out, with Dow, S&P 500, and Nasdaq futures plummeting<\/a>. Both the Dow Jones Industrial Average and S&P 500 slid by a percent or so when trading resumed Monday morning.<\/p>\n Put simply, investors are seriously on edge as they fear the worst: a prolonged war in Iran causing major oil shortages.<\/p>\n Worse yet, domestically, a \u201cflashing red warning light<\/a>\u201d went off last week when the US Bureau of Labor Statistics issued its February jobs report, finding that the economy had shrunk by 92,000 jobs<\/a> \u2014 far more than expected, raising the unemployment rate to 4.4 percent.<\/p>\n And impossible to ignore are existing fears and uncertainty<\/a> over enormous investments in AI. Companies are spending hundreds of billions of dollars on enormous data centers across the country, unprecedented capital expenditures that are seemingly propping up a waning US economy<\/a> \u2014 while also making investors nervous<\/a>.<\/p>\n While it sounds like a perfect storm, the budding crisis takes place in a very different economic order compared to previous oil supply shocks.<\/p>\n It\u2019s a precarious moment. And President Donald Trump indicated over the weekend<\/a> that the administration won\u2019t be tapping into the Strategic Petroleum Reserve to ease the pressure.<\/p>\n \u201cWe\u2019ve got a lot of oil,\u201d he told reporters on Air Force One. \u201cOur country has a tremendous amount. There\u2019s a lot of oil out there. That\u2019ll get healed very quickly.\u201d<\/p>\n The Trump administration also promised a $20 billion<\/a> reinsurance \u2014 insurance for insurance \u2014 program to get oil flowing through the Strait of Hormuz again.<\/p>\n But whether the president\u2019s reassurances will be able to calm the situation as Wall Street sees red remains to be seen, as the end of his war on Iran is seemingly nowhere in sight<\/a>.<\/p>\n The \u201cworld is looking at the biggest disruption in oil production in history as well as a resounding shock to global gas markets,\u201d Yergin concluded. \u201cThe key question for global energy markets now is the duration of this explosive war.\u201d<\/p>\n