Energy expert McNally: The market seriously underestimates Iran's ability to blockade the Strait of Hormuz for an extended period

Robert McNally, founder and president of energy consultancy Rapidan Energy Group, has warned that the market is seriously underestimating Iran's ability and willingness to disrupt the Strait of Hormuz. If this waterway is blocked for a prolonged period, the oil and gas markets will face an unbearable shock.

Speaking on Bloomberg TV on Monday, McNally stated that Iran has the means and capability to keep the Strait of Hormuz unsafe for a considerable time, with the duration likely to exceed market expectations. He pointed out that if U.S. Central Command fails to assure the world of free navigation through the Strait of Hormuz, and shipping flows are not restored by the end of this week, "the market will enter a scenario it has never seriously contemplated or even believed could happen."

McNally bluntly stated that if the Strait of Hormuz remains blocked, "the math for the oil and gas market will look extremely grim." He believes that Iran’s current strategic intent is to drive up oil prices, place energy cost pressure squarely at the core of Trump’s policy agenda, and eventually force him to back down.

Historical Precedents Do Not Apply, Iran Has the Ability for Prolonged Resistance

McNally refuted the market’s optimism based on historical experience. He noted that the market routinely looks back at the First and Second Gulf Wars, and even the 1988 U.S.-Iran naval confrontation—when the U.S. Navy sank about half of Iran’s fleet in a single afternoon. However, he emphasized, "This time is completely different from those events."

Compared to the past, Iran now possesses more advanced weaponry and deeper coastal defenses conducive to sustained combat, giving it the real ability to carry out long-term interference in the Strait of Hormuz. McNally believes that the inertia of the market’s expectation for the U.S. military to quickly resolve issues is fundamentally misplaced in the current situation.

Regime Survival Pressure Drives "Unconventional" Decisions

In response to the mainstream view that Iran would not easily block the Strait of Hormuz, McNally offered a different perspective. Normally, Iran would be cautious about such an action, but McNally stressed, "This is not a normal time."

He pointed out that the Iranian regime is currently at a tipping point of survival, and is taking a series of unconventional measures—escalating the conflict into a regional war, pushing GCC countries into confrontation, attacking hotels and multiple targets, and even drawing in European countries. "Iran is resorting to do-or-die tactics."

McNally highlighted that, militarily, Iran does not have escalation dominance. Therefore, the only real leverage Iran can count on is its impact on oil prices—applying long-term upward pressure to force Trump to withdraw.

McNally believes that Iran’s current strategic blueprint is directly inspired by the Houthi resistance last April. He said that Trump regards Venezuela as the ideal pressure scenario, while Iran is looking to the Houthis—who, after 52 days under attack, more than a thousand munitions, and over $1 billion in military action, still were not forced to stop the blockade of Bab el-Mandeb.

"We have put far more pressure on Iran than on the Houthis, but Iran has much stronger weaponry and more advantageous coastline." McNally stated that Iran’s calculation is: embed high oil prices into Trump’s policy agenda so that, within a few weeks, he is overwhelmed and ultimately chooses to back down. "I believe this is Iran’s strategy."