Analysis by Energy Workforce President Tim Tarpley
As of Wednesday, Brent crude was trading at $67.59 per barrel, while WTI was at $62.49. This was up slightly after Iran partially closed the Strait of Hormuz during a “military drill,” reigniting fears that it could try to fully close the strait, trapping a huge volume of the world’s oil in the Middle East. Historically, Iran has used the closure of the Strait as a threat to leverage, but has never really followed through. Much like other Iranian threats, this is often more bluster than reality, and any move to do so by Iran would certainly result in massive retaliation by the US and other Western forces.
This all comes in the context of increasing signs that the US may be closer to launching a military strike against the Iranian regime. Talks in Geneva on a deal with Iran are continuing, but they do not appear to be going anywhere. Meanwhile, US Air Force assets based in the UK, including refueling tankers and fighters, are being repositioned closer to the Middle East. The US is also moving air defense systems to the region, and dozens of US military cargo planes have flown equipment to Jordan, Bahrain, and Saudi Arabia. In fact, publicly available data reveals over 250 US cargo flights to the region.
President Trump appeared willing to launch a strike against the regime a few weeks back during a round of massive protests; however, the military was also focused on Venezuela at the time. It did not have adequate resources in the region. That is not the case now. The big question for the world’s energy markets is what would happen if the Iranian regime fell? Iran has a very different power structure than Venezuela or other countries in the past, and US Intelligence thinks the Islamic Revolutionary Guard would likely take over in the event of a leadership vacuum. As of early 2026, Iran’s crude oil output is around 2.36 million bpd, and its infrastructure is in much better shape than Venezuela’s was; EIA estimates that Iran could have long-term stable production around 3.8 million bpd. This could be significant if a new leadership structure were put in place that was not subject to Western sanctions.
