Market is overly optimistic about resumption of Strait of Hormuz, says Rapidan Energy's Bob McNally

• The market is 'overly optimistic' about how quickly Strait of Hormuz flows would resume if disrupted, expecting days rather than weeks.
• Iran possesses significant asymmetric capabilities including thousands of drones, fast attack craft, anti-ship cruise missiles, long-range artillery, and various mines.
• Past geopolitical events (Abqaiq attack, Russia-Ukraine invasion) saw oil price spikes reverse quickly, leading to market skepticism about sustained disruptions.
• Current U.S. military actions have not yet significantly degraded Iran's capabilities to disrupt the Strait, which remain largely intact.

Rapidan Energy Group's Bob McNally argues that the market is overly optimistic about the swift resolution of any conflict in the Strait of Hormuz. He believes that while the U.S. military will ultimately prevail, it would take weeks, not days, to neutralize Iran's layered asymmetric threats, leading to a prolonged disruption of oil and natural gas flows. The market's current skepticism is attributed to past 'boy who cried wolf' scenarios and an underestimation of Iran's capabilities.