Iran's Hormuz Threat May Be More Bark Than Bite

Early Saturday morning, as Israel and the U.S. launched airstrikes on Iran's nuclear facilities, crypto traders watched their screens with growing alarm. Bitcoin tumbled from $65,600 to $63,000 before clawing back to $65,000. Oil futures on Hyperliquid surged over 5%.

But it wasn't just the immediate military action that spooked markets—it was what might come next.

The $150 Oil Nightmare Scenario

Crypto Twitter erupted with fears that Iran could retaliate by closing the Strait of Hormuz, the 21-mile-wide chokepoint through which 20 million barrels of oil flow daily—roughly 20% of global shipments.

"If the Strait of Hormuz is threatened, oil could spike toward $120–$150," warned one popular crypto analyst. The math is simple but terrifying: an inflation shock, market sell-offs, dollar surge, and emerging market currency collapse.

Several oil majors have already reportedly suspended shipments through the strait, lending credence to the fears.

Geography vs. Geopolitics

But Daniel Lacalle, PhD economist and chief economist at Tressis, isn't buying the doomsday scenario. "Iran would shoot itself in the foot," he argues.

The numbers support his skepticism. Iran produces 3.3 million barrels daily but exports only half, almost entirely to ally China. A strait closure would devastate Iran's own economy first.

Geography adds another wrinkle. While Iran and Oman split the strait roughly down the middle, the actual shipping lanes run predominantly through Omani waters. Iran's side is too shallow for large tankers—they need Oman's deeper channels.

"Most waterways are in Oman, not Iran," notes energy expert Dr. Anas Alhajji. "Hormuz strait has never been blocked despite all wars—it cannot be blocked. Too wide. Well protected."

The Real Risk Isn't Oil

Even if a full closure is unlikely, the mere threat of escalation could keep markets on edge. Bitcoin's technical chart already signals potential weakness below the crucial $60,000 support level.

For investors, the calculation isn't just about oil prices—it's about risk appetite. Wars create uncertainty, and uncertainty kills risk assets. The weekend's crypto market volatility, the only venue open for expressing fear while traditional markets stayed closed, offered a preview of what Monday might bring.

OPEC members could quickly offset Iranian supply disruptions, and the U.S. remains the world's largest oil producer. Any price spike would likely be measured and temporary—unless the conflict spirals completely out of control.