Friday, April 24th, 2026
Laramie, Wyoming
By Dan Denning
Two clocks, one outcome. A global energy depression and a stock market crash in the balance. Tick…tick…tick….
The first is ticking in Washington. The President notified Congress of his military operation in Iran on March 2nd. Under the 1973 War Powers Act, he has sixty days to conduct that operation without Congressional approval. That sixty day deadline is May 2nd.
The President can unilaterally extend his operation by another thirty days by writing to Congress. But, he’s technically only allowed to do so if those thirty days are required to conduct the safe withdrawal of US forces. War over.
Congress could step in and pass a resolution authorizing continued military force with a simple majority in both the House or the Senate. Or–and here’s a radical idea–Congress could do its duty and exercise its authority under Article 1, Section 8, Clause 11 of the United States Constitution and vote, by a simple majority, to declare war.
The Congress has only done that eleven times in American history. The last was in 1942. Since 1942 there have been 15 ‘conflicts’ in which Congress ought to have declared war but did not. Congress will not do its duty.
Technically, the President’s special military operation ought to end next week. Realistically, it could go on for at least another 30 days. And historically, based on the post 9/11 world, it could last years or decades. But in the short term, we have one clock ticking in DC.
The other is in Iran. Like everyone else in the Gulf, Iran is shipping a lot less oil these days. Their wells can keep producing as long as they have room to store that oil. But according to unofficial figures, the Iranians will run out of available storage for their oil sometime in mid May. And then?
And then they will have to ‘shut in’ their producing wells. A ‘shut in’ turns an oil well into a static pressure vessel. The longer the ‘shut in’ the more potential damage to the oil well itself, or the long-term production of the oil reservoir below it. And obviously, you can’t sell or ship oil you aren’t producing anymore. Tick Tick. Tick.
The global oil market has lost close to 700 million barrels of oil since the war began and the Strait was closed. If things ‘normalized’ today, clearing out the tanker traffic and resuming production would take time. It will be a billion barrels of ‘lost’ oil before you know it. And it will take years and billions of dollars/yuan of investment to repair the damage to energy infrastructure already inflicted (mostly by Iran on Gulf states).
This is the largest ‘oil shock’ in history, according to the International Energy Agency (IEA). It’s affecting supply and refiners and distillate products all over the world. But the only reason it isn’t an even BIGGER shock yet is that the supply shock has been met by about four million barrels per day of demand destruction.
High oil prices HAVE affected affordability/demand in those markets furthest away from the Gulf or least able to pay or find a substitute supplier. But the supply shock and demand destruction have more or less cancelled each other out at the moment. This gives the appearance of a weirdly stable status quo, where you can have the biggest energy shock ever…but have no real-world consequences.
I would not expect that to last. I’m leaving out the question of whether financial markets have been used to distort the contract/paper prices for oil. This would be a form of ‘narrative’ control to show that the war was going fine and there was no oil crisis. But the ‘real’ price–what users are paying to unload oil–is already much higher than the ‘paper’ price in some markets.
Another weird situation. High prices will destroy demand for people at the end of the supply chain, or without friends in oil-rich places. But that demand destruction may counter falling supply and allow for ‘stable’ oil prices. For a while. Until when?
Well, either things get back to something like normal or they don’t. My guess is that the supply disruption is still wending its way through global supply chains. Higher prices and real shortages will show up in the summer, if not sooner. And it will show up in a politically sensitive food prices (shortages). All of THAT is assumes the worst of the interrupted flows and damaged infrastructure is behind us. And stocks? See below.
