Oil prices surged past $126 per barrel this week, driven by mounting fears that the Strait of Hormuz—a critical chokepoint for global oil shipments—will remain closed for the foreseeable future. The spike reflects a growing loss of confidence among investors, who have begun citing a popular market adage: "Trump Always Chickens Out," or "TACO."
The question now is whether U.S. President Donald Trump will break that pattern. Analysts and editors at The Economist are weighing the likelihood of decisive American action to reopen the strait, or whether the administration will once again pull back from confrontation.
The Strait of Hormuz, through which about 20% of the world's oil passes, has been at the center of escalating tensions. The current crisis has injected significant volatility into energy markets, with some experts warning that prices could climb even higher if the standoff persists.