How significantly does an embargo drive up oil prices?

Understanding Oil Price Movements Amid Strait of Hormuz Disruptions

Many analysts suggest that oil prices will steadily climb as shipping through the Strait of Hormuz faces ongoing obstacles. However, this perspective overlooks how financial markets operate. Markets anticipate future events and quickly adjust prices based on expectations; if traders believe the Strait will be blocked for an extended period, that scenario is reflected in prices right away, not gradually over time.

Recent developments illustrate this point. When President Trump has indicated that the conflict may soon conclude, oil prices have dropped as investors revise their forecasts for how long the Strait will remain affected.