Energy expert McNally: The market seriously underestimates Iran's ability to blockade the Strait of Hormuz for a long time.

Robert McNally, founder and president of energy consulting firm Rapidan Energy Group, warned that the market is severely 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.

McNally said Monday on Bloomberg TV that Iran possesses the means and capability to keep the Strait of Hormuz unsafe for a considerable time, and the duration will likely exceed market expectations. He pointed out that if the U.S. Central Command fails to assure unobstructed passage through the Strait of Hormuz by the end of the week and shipping traffic does not recover, "the market will enter a situation previously never seriously considered, or even believed possible."

McNally stated plainly that if the Strait of Hormuz remains blocked, "the math for the oil and gas markets will be extremely ugly." He believes Iran's current strategic intent is to drive up oil prices, put energy cost pressures at the core of Trump's policy agenda, and ultimately force him to give in.

Historical precedents do not apply: Iran has lasting resistance capabilities

McNally refuted the optimistic market expectations based on historical experience. He noted that the market habitually reviews the First and Second Gulf Wars, and even the 1988 U.S.-Iran naval conflict—when the U.S. military sank about half of Iran’s fleet in one afternoon. But he stressed, "This time is fundamentally different from those occasions."

Compared to the past, Iran now has more advanced weaponry and deeper coastal terrain favorable for sustained operations, equipping it with the actual ability to conduct long-term interference in the Strait of Hormuz. McNally believes that the market’s habitual expectation of the U.S. military quickly resolving the issue is a fundamental misjudgment under the current circumstances.

Regime survival pressure drives "unconventional" decisions

Regarding the mainstream view that Iran would not easily block the Strait of Hormuz, McNally offered a different perspective. Ordinarily, Iran would have reservations about closing the Strait, but McNally emphasized, "This is not a normal time."

He indicated that Iran’s regime is currently at a critical juncture for survival, taking a series of unconventional actions—expanding the conflict into a regional war, pushing GCC nations into opposition, attacking hotels and multiple targets, and even European countries may become involved. "Iran is resorting to desperate measures."

McNally pointed out that at the military level, Iran does not have escalation dominance. Therefore, Iran’s only real leverage is the impact on oil prices—pressuring Trump by driving up oil prices for an extended period, forcing him to withdraw.

McNally believes Iran’s current strategic template is modeled after the Houthis’ resistance experience last April. He said Trump regards Venezuela as an ideal pressure example, while Iran looks to the Houthis—who, after enduring 52 days of attacks, over a thousand pieces of munitions, and a military operation costing more than $1 billion, still were not forced to stop blocking the Bab el-Mandeb Strait.

"We’ve put far more effort into Iran than into the Houthis, but Iran has much stronger weaponry and more favorable coastline." McNally said, Iran’s calculation is: embed high oil prices in Trump’s policy agenda, making him buckle under the pressure after a few weeks and ultimately choose to give in. "I believe this is Iran’s strategy."

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