Since the start of the United States–Iran conflict in late February, few tankers have crossed the Strait of Hormuz, a chokepoint through which roughly one-fifth of the world’s seaborne oil trade normally passes. The effective closure of the strait has severely disrupted the supply of a commodity essential to modern economic functioning, triggering a sharp rise in global crude oil prices. As shown by the blue line in the left panel of Figure 1, the average monthly real price of a barrel of West Texas Intermediate (WTI) crude oil—the U.S. benchmark—jumped from $65 in February to almost $100 in May, a 54 percent ... (full story)