Crude Oil Jumps 35% as Strait of Hormuz Closes
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- Crude oil futures surged 35% in the last five days as supply was temporarily cut off by the U.S.-Iran conflict, driving investors into hard assets like oil and gold (GCK26)
- The Strait of Hormuz became functionally impassable for most commercial shipping as of early March 2026 after Iran threatened to set vessels ablaze, causing an 80% drop in traffic through the waterway
- The strait typically funnels 20% of the world's daily seaborne oil, making the closure a supply shock rather than a purely paper-market move
- The escalation was fueled by U.S. and Israeli actions against Iran, with bombings continuing as the physical infrastructure of energy supply came under direct attack
- Warren Buffett wrote in his 1979 shareholder letter that the government is "exceptional" at "printing money and creating promises" but fundamentally cannot "print gold or create oil" — a quote the article frames as directly relevant to the current crisis
- Buffett compared Berkshire Hathaway's (BRK.A)(BRK.B) book value to gold, noting that 15 years of reinvested earnings still only bought the same half-ounce of gold it would have in 1964, illustrating the scarcity of physical resources
Why it matters: An 80% traffic collapse through a waterway carrying 20% of global seaborne oil has already pushed crude futures up 35% in five days — a measurable, physical supply shock. Oil companies collect more revenue from the spike, while oil-importing economies face immediate cost-push pressure. Buffett's 1979 observation that governments can print money but not oil was written for exactly this scenario, and the article argues it has never been more apt.
