Why Oil Prices Haven’t Skyrocketed Despite Strait of Hormuz Crisis: Expert Analysis

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Robinson Meyer: [0:47] Hello, it’s Wednesday, May 13, and the Strait of Hormuz is still closed.

But oil is only trading at $107 a barrel, at least in the global Brent crude benchmark. So what is happening? This has been the question lately.

We’ve lost more than 10 million barrels a day of a 100 million barrel a day market. That’s 10% of supply. And while prices are higher than they were in February when the Iran war started, they’re lower than they were after Russia invaded Ukraine in 2022—and there was no supply disruption at that time.

Robinson Meyer: [1:20] So what’s happening? Why has oil not yet responded to the extreme deficit that we see in the physical market?

This is the question I asked John Arnold on a recent episode of Shift Key. It’s frankly the question I find myself getting asked more and more. And this is the question I’m going to pose today to someone who has been one of the most recognizable and important voices on energy, environment, and national security policy for a long time.

Why isn’t oil higher? I was excited to sit down a few days ago with Jason Bordoff.

He’s the founding director of the Center for Global Energy Policy at Columbia University’s School of International and Public Affairs. He’s also a co-founding dean of the Columbia Climate School. He previously served as special assistant to President Barack Obama and senior director for energy and climate change on the staff of the White House National Security Council. And before that, he was in senior policy roles on the White House’s National Economic Council and Council on Environmental Quality.

We talk about oil today. Of course, we talk about Iran and the Strait of Hormuz. We talk about what we’ve learned from this crisis, what could still happen. But we wound up having a broader conversation about the future of climate and energy policy in the United States, what we each learned from the Biden era, and whether there’s a new consensus emerging around energy affordability and national security.

It’s a great discussion. I found it so interesting.

I’m Robinson Meyer, the founding executive editor of Heatmap News, and it’s all coming up on this episode of Shift Key.

Robinson Meyer: [2:43] Jason Bordoff, welcome to Shift Key.

Jason Bordoff: [2:46] So great to be on for the first time. And congrats on all the success with Heatmap. It’s been a really valuable resource and great.

Robinson Meyer: [2:53] Well, thank you. Thank you so much.

So I wanted to begin with my sense of bafflement or befuddlement, which surrounds the entire mess around the Strait of Hormuz and Iran at this point. So we are recording this. I’m kind of now duty bound to say because the erratic nature of events on