The current disruption in global energy markets traces back to Iran's 1978 oil worker strikes that toppled the Shah and ushered in an Islamic republic hostile to the West. This created the nightmare scenario of Strait of Hormuz closure that now threatens to send energy prices skyrocketing. The strategic waterway handles 20% of world oil and 20% of global LNG shipments.

On any given day, 90 tankers typically transit the strait, but virtually none are sailing now. Brent crude prices have jumped 50% since the US military buildup in the Gulf began, while Asian spot LNG prices have nearly doubled. The crisis initially impacts Asia since 80% of Gulf oil and 90% of LNG now flows east, but shortfalls will soon reach North American gasoline pumps and European jet fuel supplies.

Despite the severity, global energy markets show surprising resilience due to diversification. The US has transformed from the world's largest oil importer to its biggest producer and LNG exporter. Strategic petroleum reserves held by China and IEA members provide additional buffers. Saudi Arabia and Abu Dhabi have built pipelines bypassing the strait as insurance against exactly this scenario. While $90+ oil prices fall short of worst-case projections, the world faces the biggest oil production disruption in history alongside a major shock to global gas markets.