Energy in Crisis

Energy in Crisis: How the Conflict in Iran is Reshaping Global Trade

Expert insights from Michelle Schulz on surging oil prices, insurance standstills, and the ripple effect on American consumers.

Overview

The intensifying conflict with Iran has sent shockwaves through the global economy, pushing crude oil prices past $100 a barrel for the first time in four years. With approximately 20% of the world’s oil supply flowing through the Strait of Hormuz, the halt of tanker traffic has created a supply bottleneck that threatens to drive up costs across nearly every sector of the U.S. economy—from transportation and manufacturing to the price of groceries.

The Logistics of a Standstill

In a recent interview with Gray Media’s Local News Live, Michelle Schulz, founder of Schulz Trade Law, explained that the primary driver behind the sudden halt in traffic isn’t just the physical conflict, but the collapse of the necessary financial and insurance infrastructure that allows global trade to function.

As shipping lanes become combat zones, the cost of risk becomes prohibitive. Michelle noted the immediate impact on the maritime industry:

“There was a risk that those ships would come under attack from Iran, and as soon as it seemed to become a reasonable possibility, insurers like, you know, Lloyds of London, insurers refused to insure the ships going through. And that basically stopped traffic in its tracks.”

This interruption is more than a logistical hurdle; it is a catalyst for broader inflation. Because oil and gas are foundational to modern industry, the spike at the pump is only the beginning.

As Michelle emphasized during the segment,

“Those prices are going to go up, and they will make other prices go up.”