Where Are Oil Prices Heading?

September 20, 2026

AI Summary

5 min read

The Strait of Hormuz handles about a fifth of the world’s oil, and for decades it was treated as a reliably policed chokepoint. That assumption has collapsed. In this episode of WSJ What’s News, energy journalist Andy Kritchlow argues that the combination of cheap drone technology, real-time tanker tracking, and a reluctant United States has fundamentally broken the security framework that protected Middle Eastern oil flows since the 1970s. The conversation then turns to what that means for American consumers, the midterm elections, and the limited tools left to bring prices down.

The New Vulnerability: Drones, Data, and U.S. Reluctance

Kritchlow’s central claim is that the nature of the threat has changed in ways that make old defenses obsolete. During the 1980s tanker war, the risks were arguably greater in volume, but the attackers lacked two things: precision drones and the ability to track vessels in real time. Now, an “agrarian force” like the Houthis in Yemen, equipped with rudimentary drone technology and Iranian support, can effectively shut down the Bab el-Mandeb strait—which handles about 3.5 million barrels of crude per day—and strike deep into Saudi Arabia, as they did against the East-West pipeline pumping station.

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What you'll learn

1 (00:32) **Show Introduction** - Luke Vargas sets up the episode's focus on the precarious state of Middle Eastern energy supplies and their impact on consumers, the global economy, and the midterm elections.
2 (01:14) **The New Security Environment for Energy** - Andy Kritchlow argues that the entire security environment around global energy has been fundamentally changed by modern warfare.
3 (02:59) **China's Exposure and Shifting Demand** - Kritchlow identifies China as the most exposed major economy due to its dependence on Middle Eastern oil and its lack of naval protection for shipping lanes.
4 (04:07) **US Stays on the Sidelines** - The discussion turns to the US response, specifically President Trump's refusal to attack the Houthis despite appeals from Saudi Arabia.
5 (05:46) **Forecasting the Strait of Hormuz** - Luke Vargas brings up a Citigroup forecast that the Strait of Hormuz will reopen in Q4, which Andy Kritchlow dismisses as a dangerous assumption.
6 (07:28) **The Impact on US Consumers: Gas and Diesel** - The conversation shifts to the domestic US impact, with Conrad Putzier explaining that energy costs are the primary driver of inflation this year.
7 (09:27) **Inflation: A Targeted Story, Not a Spiral** - Putzier clarifies that the energy price shock has not yet seeped into core inflation, which is good news for the Federal Reserve.

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Guests on this episode

Conrad Putzier

Show Notes

As Middle East energy security breaks down, gas prices are creeping up and diesel is hitting record highs – driving inflation in the U.S. and around the world. With the help of Dow Jones Energy's Andy Critchlow we'll look at the historic disruptions battering energy supply chains in and around the Persian Gulf. And WSJ reporters Benoît Morenne and Konrad Putzier explain why dwindling strategic reserves and a narrow spectrum of politically-palatable government interventions mean relief likely isn't coming anytime soon. Luke Vargas hosts.