Every single day, 20 million barrels of oil used to flow through the Strait of Hormuz. Now, almost none of it is moving.

That is how much oil used to pass through the Strait of Hormuz. Right now, almost none of it is moving. Oil prices have already crossed $97 per barrel. Goldman Sachs is warning about $200. And economists everywhere are using the same word: stagflation.

So here is the real question. Are we heading into the biggest economic crisis since the 1970s? And what does that mean for you?

Part 1 covers what stagflation actually is, how the oil shock started it, and why 2026 might be worse than anything we have seen before. Part 2 gets into what this means for your money and what could happen next.

Stagflation happens when two bad things hit you at the same time. Prices keep going up, while the economy slows down and jobs start disappearing.

Normally these do not happen together. When prices rise, it usually means people are spending and the economy is healthy. When growth slows, prices tend to drop. Stagflation breaks that pattern entirely.

Think of it like getting a pay cut at work while your rent, groceries, and electricity bills all go up at once. Less money coming in, more going out. That feeling at a national scale is stagflation.

In a normal recession, governments cut interest rates and increase spending to create jobs. These tools usually work.

Stagflation takes those tools away. To fight inflation you need to raise rates. But higher rates slow the economy even more and destroy jobs. The central bank ends up stuck between two bad choices with no clean exit.

That is why stagflation can drag on for years while a recession typically resolves faster. The damage to regular people through lost jobs, higher prices, and shrinking savings runs much deeper.

The signals are already there. Oil prices surged over 60% since late February 2026. The US lost 92,000 jobs in February alone, pushing unemployment to 4.4%. Consumer confidence is falling fast.

Bank of America is already calling this a stagflationary shock. Wall Street strategist Ed Yardeni puts the stagflation probability for 2026 at 35%. These are not small warnings. They are exactly the kind of numbers that appear right before things get noticeably worse.

The Strait of Hormuz is only 34 kilometers wide at its narrowest point. But before the crisis, 20% of global daily oil supply passed through it. Around 20 million barrels every day.

Since late February 2026, that number dropped to nearly zero. Goldman Sachs estimates the daily shortfall at 11.4 million barrels, more than the combined daily oil consumption of the UK, France, Germany, Spain, and Italy together.

Emergency reserves have been released. The IEA coordinated 400 million barrels across 32 countries, the largest release in history. But that only buys time.

The French government estimates 30 to 40% of Gulf refining capacity has been damaged, with repairs taking up to three years. This does not simply reset overnight.

Most people think this is just about gas prices. It is much bigger than that.

Oil feeds into plastics, fertilizers, medicines, and shipping. When fuel costs rise, the price of everything that moves by truck, ship, or plane goes up with it.

Workers then demand higher wages to keep up. Companies raise prices or cut staff. Both outcomes push inflation higher and growth lower at the same time.

The global oil budget before this crisis was around 2 to 3 trillion dollars per year. It is now heading toward 5 to 8 trillion. That extra spending has to come from somewhere, and it comes from every other part of the economy.

The shock is rolling across the world in order of shipping distance from the Gulf.

Asia got hit first and hardest. Japan, South Korea, Vietnam, and India all depend heavily on Gulf oil. South Korea's president publicly told citizens to save every drop of fuel they can.

Europe follows around mid-April, with about 1.1 million barrels per day of imports at risk. The United States comes last due to geography and domestic production.

But higher global prices still feed into American inflation, and a slowdown in Asia or Europe will eventually reach the US economy too.

The 1970s oil crises are the closest comparison economists have right now.

In 1973, the OPEC embargo removed 4 million barrels per day, about 7% of global supply. That was enough to triple oil prices and trigger recessions across the developed world.

In 1979, the Iranian Revolution removed another 5 million barrels per day, kept supply tight for years, and forced the US Federal Reserve to raise rates all the way to 20% to break inflation.

The 2026 disruption involves up to 20 million barrels per day. Five times larger than 1973 in raw volume.

Size is not the only problem. The structure of this crisis is harder to escape.

In the 1970s, supply could be rerouted and diplomacy eventually worked. In 2026, the Strait of Hormuz is a physical chokepoint with no real alternative. Roughly 80% of Asia's oil imports flow through it. You cannot reroute that volume anywhere else quickly.

On top of that, this crisis arrives after COVID, the 2022 Ukraine energy shock, and 2025 tariff disruptions. Government debt is high. Fiscal space is thin. The world has less cushion to absorb another major hit than it did fifty years ago.

The scale and speed of the 2026 shock already exceeds both previous crises. Whether the damage matches depends on one thing: how long the Strait stays closed.

That is Part 1. You now have a clear picture of what stagflation is, how the oil shock triggered it, and why 2026 is shaping up to be historically serious.

Part 2 covers what this means for your money, the scenarios ahead, and what people are actually doing to protect themselves right now.

⚠️ Disclaimer: This newsletter is for informational purposes only, just for fun and knowledge. This is not investment advice. Your money, your responsibility!