Let's be as wildly optimistic as we possibly can and assume that Iran agrees to allow free passage through the Strait of Hormuz with absolutely no tolls or restrictions starting tomorrow. Before normal traffic through the Strait could resume, Iran would first have to remove all of the mines that they have laid in the Strait, and that could take months. Once all of the mines have been removed, it will take the tankers that are currently trapped in the Persian Gulf weeks to arrive at their destinations. Moving forward, Persian Gulf countries will be exporting much less oil and natural gas for the foreseeable future because of all the oil and natural gas infrastructure that was damaged or destroyed during the war. It will take years before all of that infrastructure is fully repaired and rebuilt. Meanwhile, global supplies of oil and natural gas will be very tight for an extended period of time.

What I have just laid out for you is the best case scenario.

Ultimately, what we end up facing could be so much worse.

Over the past couple of months, global oil reserves have been falling at the fastest rate ever recorded…

Record inventory draw: Global oil stocks have fallen by 246 million barrels in March-April, with draws in May hitting a record 8.7 million barrels per day.

Hormuz closure impact: The Strait of Hormuz shutdown has cut off 25% of the world's seaborne oil, compounding already low reserves and boosting prices.

US price outlook: Analysts expect U.S. gasoline prices could reach $5 this summer unless flows resume, with relief unlikely before autumn.

Needless to say, this is not sustainable.

Here in the United States, the strategic petroleum reserve has been dropping at a record-breaking pace…

The SPR's most recent drawdown, covering the week ended May 22, shows a drop of 9.1 million barrels, leaving the reserves at 365 million barrels. The previous weekly drawdown, covering the week of May 15, was its steepest on record — the U.S. withdrew 9.92 million barrels from the SPR then.

Before that record-breaking decline, the largest weekly drop in the SPR's history occurred in the week ended Oct. 7, 2022, when the reserves dropped by 7.41 million barrels, and was connected to the war in Ukraine.